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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Bharat Petroleum Corporation Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2017

Corporation Overview

Bharat Petroleum Corporation Limited referred to as “BPCL’ or “the Corporation” was incorporated on 3rd November, 1952. BPCL is a Government of India Enterprise listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Corporation is engaged in the business of refining of crude oil and marketing of petroleum products. It has refineries at Mumbai and Kochi, LPG bottling plants and Lube blending plants at various locations. The Corporation’s marketing infrastructure includes vast network of Installations, Depots, Retail Outlets, Aviation Fuelling Stations and LPG distributors.

Additional information in respect of Notes no. 2, 4 and 5:

a) Land:

i) Freehold land includes Rs.94.66 Crores (as at 31st March 2016 Rs.126.33 Crores and as at 1st April 2015 Rs.387.56 Crores) capitalized at various locations for which conveyance deeds are yet to be executed and/ or mutation is pending.

ii) Freehold land includes Rs.2.20 Crores (as at 31st March 2016 Rs.2.20 Crores and as at 1st April 2015 Rs.2.20 Crores) which is in the process of being surrendered to the Competent Authority.

iii) Leasehold land represents land taken on finance lease for more than 99 years.

b) Buildings include Ownership flats of Rs.41.07 Crores (as at 31st March 2016 Rs.40.02 Crores and as at 1st April 2015 Rs.39.02 Crores) in proposed / existing co-operative societies and others.

c) Other adjustments include capitalization of foreign exchange differences (net) of Rs.226.25 Crores (Previous year Rs.313.52 Crores) and borrowing costs of Rs.212.89 Crores (Previous year Rs.35.54 Crores).

d) Freehold Land, Plant and Equipment, Tanks and Pipelines, Railway Sidings and Buildings jointly owned in varying extent with other Oil Companies / Railways: Gross Block Rs.248.65 Crores (as at 31st March 2016 Rs.243.22 Crores and as at 1st April 2015 Rs.185.18 Crores), Cumulative Depreciation Rs.65.18 Crores (as at 31st March 2016 Rs.54.45 Crores and as at 1st April 2015 Nil), Net Block Rs.183.47 Crores (as at 31st March 2016 Rs.188.77 Crores and as at 1st April 2015 Rs.185.18 Crores).

e) Charge has been created over the fixed assets of the Company, mainly Plant and Machinery at Mumbai Refinery and Kochi Refinery in regard to the borrowings- Refer Note no. 24.

f) Compensation received from third parties in respect of items of Property, Plant and Equipment that were impaired, lost or given up during the year Rs.1.82 Crores (Previous year Rs.2.09 Crores).

g) Deduction from Gross Block includes :

i) Reversal of excess capitalization of Rs.27.05 Crores (Previous year Rs.27.03 Crores)

ii) Deletions during the year Rs.66.89 Crores (Previous year Rs.47.76 Crores)

h) Depreciation and amortization for the year includes:

i) Charged to Statement of Profit and Loss Rs.1901.61 Crores (Previous year Rs.1852.17 Crores)

ii) Depreciation of Rs.3.46 Crores (Previous year Rs.6.53 Crores) has been provided for asset not in use and has been classified as non current asset held for sale.

i) Deductions from depreciation includes:

i) On reversal of excess capitalization Rs.1.75 Crores (Previous year Rs.0.05 Crores).

ii) On withdrawal of depreciation on deletion during the year Rs.15.02 Crores (Previous year Rs.9.93 Crores).

iii) On reclassification of assets Rs.12.00 Crores (Previous year Rs.14.09 Crores).

j) The Right of Way has been acquired under the Petroleum & Mineral Pipelines Act, 1962. As per the provisions of the Act, the Right of Way is perpetual in nature. Accordingly, the Corporation has assessed the useful life as indefinite.

iii The Corporation has only one class of shares namely equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per equity share. In the event of liquidation of the Corporation, the holders of equity shares will be entitled to receive the remaining assets of the Corporation in proportion to the number of equity shares held.

The Corporation declares and pays dividend in Indian Rupees. The final dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

iv During the Financial year 2016-17, the Corporation has issued Bonus Shares in the ratio of 1:1 by capitalization of General Reserves. The total number of shares issued is 72,30,84,248 having face value of Rs.10 each. During Financial Year 2012-13, the Corporation had issued Bonus Shares in the ratio of 1:1 by capitalization of General Reserves. The total number of Bonus Shares issued is 36,15,42,124 equity shares having face value of Rs.10 each.

Nature and purpose of Reserves Capital Reserve

It represents capital reserve appearing in the financial statements of erstwhile Kochi Refineries Limited (KRL) transferred on amalgamation.

Debenture Redemption Reserve

Debenture Redemption Reserve represents reserve created out of the profits of the Corporation available for distribution to shareholders which is utilised for redemption of debentures/bonds.

General Reserve

General Reserve represents appropriation of retained earnings and are available for distribution to shareholders. Foreign Currency Monetary Item Translation Difference Account

Foreign Currency Monetary Item Translation Difference Account represents amounts recognised on account of translation of long term foreign currency denominated borrowings not related to acquisition of depreciable assets. Amounts so recognised are amortized in the Statement of Profit and Loss over the remaining maturity of related borrowings.

Retained Earnings

Retained Earnings represents surplus/accumulated earnings of the Corporation and are available for distribution to shareholders.

* The Corporation had allotted redeemable non-convertible 8.65% Debentures of face value of Rs.700 Crores on 8th October 2012 redeemable on 8th October 2017 with a put call option which was exercised on 8th October 2015. Accordingly Corporation has redeemed the debentures during the Financial Year 2015-16. These were secured by first legal mortgage by way of a Registered Debenture Trust Deed over the fixed assets of the Company, mainly Plant and Machinery at Mumbai Refinery. The relevant charge has been satisfied.

** The Corporation had allotted non-convertible 7.35% Debentures of face value of Rs.550 Crores on 10th March 2017 redeemable on 10th March 2022. These were secured by first legal mortgage by way of a Registered Debenture Trust Deed over the fixed assets of the Company, mainly Plant and Machinery at Mumbai Refinery.

*** Term Loan is secured by first legal mortgage mainly over Plant and Machinery at Mumbai Refinery and Kochi Refinery.

NOTE 1 TRANSITION TO IND AS

These are the Corporation’s first financial statements prepared in accordance with Ind AS. The Corporation has adopted all the Ind AS and the adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting Standards. The transition was carried out from Generally Accepted Accounting Principles in India (Indian GAAP) as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the “Previous GAAP”.The Significant Accounting Policies set out in Note No. 1 have been applied in preparing the financial statements for the year ended 31st March 2017, 31st March 2016 and the opening Ind aS balance sheet on the date of transition i.e. 1st April 2015. In preparing its Ind AS Balance Sheet as at 1st April 2015 and in presenting the comparative information for the year ended 31st March 2016, the Corporation has adjusted amounts previously reported in the financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Corporation in restating its financial statements prepared in accordance with previous GAAP and how the transition from previous GAAP to Ind AS has affected the Corporation’s financial position, financial performance and cash flows.

I. Explanation of transition to Ind AS

In preparing the financial statement, the Corporation has applied the below mentioned optional exemptions and mandatory exceptions.

Business combination exemption

The Corporation has elected to apply the requirements of Ind AS 103, “Business Combinations” prospectively to business combinations on or after the date of transition (1st April 2015). Pursuant to this exemption, goodwill arising from business combination has been stated at the carrying amount under previous GAAP

Property, Plant and Equipment; Investment Property and Intangible Assets exemption

The Corporation has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment, investment properties and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015).

Investment in equity shares other than Subsidiaries, Joint Ventures and Associates

The Corporation has designated its investment in equity shares other than subsidiaries, Joint Ventures and Associates held as at 1st April 2015 as Fair Value through Other Comprehensive Income based on facts and circumstances at the date of transition to Ind AS.

Investment in Subsidiaries, Joint Ventures and Associates

The Corporation has elected to use the exemption to measure all investments in Subsidiaries, Joint Ventures and Associates as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015).

Derecognition of financial assets and financial liabilities

The Corporation has elected to use the exemption for derecognition of financial assets and liabilities prospectively i.e. after 1st April 2015.

Long Term Foreign Currency Monetary Items

The Corporation has elected to continue the policy adopted under previous GAAP for accounting the foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items outstanding as of 31st March 2016 i.e. foreign exchange differences arising on settlement or translation of longterm foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the asset and in other cases, if any, accumulated in “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of the liability.

Classification and measurement of financial assets

Ind AS 101 requires an entity to assess the classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, the Corporation has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of financial assets accounted at amortized cost has been done retrospectively except where the same is impracticable.

Service Concession Arrangement

The Corporation has elected to use the exemption available under Ind AS 101 to continue the carrying value as per previous GAAP for all of its intangible assets under the service concession arrangements.

Notes to reconciliations:-

A. Proposed Dividend

Under previous GAAP proposed dividend including dividend distribution tax (DDT), were recognised as a liability in the period in which they relate, as the same was considered as an adjusting event. Under Ind AS, proposed dividend is recognised as a liability in the period in which it is authorised and the distribution of dividend is no longer at the discretion of the Corporation.

B. Equity Investments at Fair Value through Other Comprehensive Income

Under previous GAAP the Corporation accounted for non-current investments in equity shares of companies other than Subsidiaries, Joint Ventures and Associates at cost less any provision for other than temporary diminution in the value of investments. Under Ind AS, the Corporation has designated these investments at Fair Value through Other Comprehensive Income.

C. Loan given to Subsidiary

The Corporation has given a concessional rate loan to one of its Subsidiary company. As per the requirements of Ind AS, this loan is to be measured at fair value on initial recognition. Since the differential on account of fair valuation of the loan on initial recognition is in the nature of equity component, the same has been considered as part of investment in Subsidiary.

D. Fair valuation of investments in Government Securities

Under previous GAAP investment in Government securities are classified as current investments and were carried at lower of cost or fair value. Under Ind AS, these investments are measured at Fair Value through Profit or Loss.

E. Trade receivables

Under previous GAAP the Corporation had recognised provision on trade receivables based on the expectation of the Corporation. Under Ind AS, the Corporation provides loss allowance on receivables based on the Expected Credit Loss (ECL) model which is measured following the “simplified approach” at an amount equal to the lifetime ECL at each reporting date.

F. Derivative Contracts

Under previous GAAP in respect of all derivative contracts (except forward contracts), only mark-to-market loss was provided. Premium / discount arising at the inception of the forward exchange contracts to hedge foreign currency risks were amortized as expense or income over the life of the contract. Exchange differences on such forward exchange contracts were recognised in the Statement of Profit and Loss. Under Ind AS, all derivative contracts are measured at fair value through profit or loss.

G. Borrowings

Under previous GAAP transaction costs in relation to borrowings were initially recognised as an asset and subsequently, amortized over the period of the loan as borrowing costs. Under Ind AS, financial liabilities in the form of borrowings have been measured at amortized cost using the effective interest rate method.

H. Spare parts

Under previous GAAP machinery spares that were specific to a particular Property, Plant and Equipment (PPE) were capitalized to the cost of the PPE. Replacement of such spares were charged to the Statement of Profit and Loss. Spares other than above, were inventorised on procurement and were charged to Statement of Profit and Loss on consumption. Under Ind AS, all significant spare parts which meet the definition of Property, Plant and Equipment are capitalized as Property, Plant and Equipment and in other cases, the spare part is inventorised on procurement and charged to Statement of Profit and Loss on consumption.

I. Capital Grant

Under previous GAAP Government Grants in respect of Property, Plant and Equipment was presented as part of Reserves and Surplus. Under Ind AS, Government Grants in respect of Property, Plant and Equipment need to be presented as deferred income as part of liabilities.

J. Excise Duty

Under previous GAAP revenue from sale of goods was presented net of the Excise Duty. Under Ind AS, revenue from sale of goods is presented inclusive of Excise Duty. Accordingly, Excise Duty has been presented in the Statement of Profit and Loss as an expense.

K. Inventory valuation

Under previous GAAP the Corporation had during financial year 2015-16, changed the method of determination of cost of inventories from ‘Weighted Average’ to ‘First in First Out’ (FIFO) in respect of crude oil and finished products (except lubricants which were continued to be determined at weighted average). Under Ind AS, the Corporation is required to use the same accounting policies in its Opening Ind AS Balance Sheet and throughout for all periods presented in its first Ind AS financial statements. Accordingly, the Corporation has restated the opening value of inventories as per FIFO method.

L. Remeasurement of defined benefit liabilities

Under previous GAAP the Corporation recognised remeasurement of defined benefit plans under Profit or Loss. Under Ind AS, remeasurement of defined benefit plans are recognised in Other Comprehensive Income.

M. BPCL Trust for investment in shares

As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (“KRL”) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the financial year 2006-07. After the 1:1 Bonus issue in July 2012 and July 2016, presently the trust holds 13,49,14,948 equity shares of the Corporation. Under Ind AS, the cost of the original investment together with the additional contribution to the corpus of the trust made in 2014-15 has been reduced from the total equity of the Corporation. To the extent of the face value of the shares, the same has been reduced from the Paid up Share capital of the Corporation and the balance has been reduced from Other Equity under a separate reserve. Accordingly, the income received from the Trust during the financial year 2015-16 has been recognised directly under Other Equity of the Corporation.

N. Fair value measurement of optionally convertible debentures

Under previous GAAP the Corporation accounted for optionally convertible debentures which are classified as non-current investments at cost. Under Ind AS, these investments are measured at fair value through profit or loss.

O. Others

Other adjustments on account of transition to Ind AS include reversal of amortization of Intangible asset at indefinite useful life, reclassification of Property, Plant and Equipment to Intangible asset as part of service concession arrangements, amortization impact of land leases classified as Finance Lease and reclassification of Land lease classified as Operating Leases from Property, Plant and Equipment to Prepaid rentals, classification of Investment Property, fair valuation of deposits and loans given at concessional rate of interest to employees and effect of adjustments relating to revenue recognition.

P. Deferred Tax

Under previous GAAP deferred tax accounting was done using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Under Ind aS, accounting of deferred taxes is done using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

Consequent to non-revision in retail selling prices corresponding to the international prices and applicable foreign exchange rates prevailing during the year, the Corporation has suffered gross under recovery of Rs.1,172.83 Crores (Previous year Rs.1,796.50 Crores) on sale of sensitive petroleum products. As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as follows:

a) Nil (Previous year Rs.198.01 Crores) discount on crude oil / products purchased from ONGC/GAIL/NRL which has been adjusted against purchase cost;

b) Rs.1,172.83 Crores (Previous year Rs.1,598.49 Crores) subsidy from Government of India has been accounted as Revenue from operations.

After adjusting the above compensation, the net under recovery absorbed by the Corporation is Nil (Previous year under recovery Nil).

NOTE 2

As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (“KRL”) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the financial year 2006-07. After the 1:1 Bonus issue in July 2012 and July 2016, presently the trust holds 13,49,14,948 equity shares of the Corporation. The cost of the original investment together with the additional contribution to the corpus of the trust made in 2014-15 has been reduced from the total equity of the Corporation. To the extent of the face value of the shares, the same has been reduced from the Paid up Share capital of the Corporation and the balance has been reduced from Other Equity under a separate reserve. Accordingly, the income received from the Trust during the financial years 2016-17 and 2015-16 has been recognised directly under Other Equity of the Corporation.

NOTE 3

The Corporation has numerous transactions with other oil companies. The outstanding balances (included under Trade Payables / Trade Receivables, etc.) from them including certain other outstanding credit and debit balances are subject to confirmation/reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement and are accounted as and when ascertained.

NOTE 4

During the Financial Year 2016-17, provision has been made under Salaries and Wages in respect of pay revision dues (including retiral dues) to employees w.e.f. 1st January 2017 at an estimated amount of Rs.596.86 Crores based on the available information and judgement.

NOTE 5 SERVICE CONCESSION ARRANGEMENTS

The Corporation has entered into service concession arrangements with entities supplying electricity (“The Regulator”) to construct, own, operate and maintain a wind energy based electric power generating station (“Plant”).

Under the terms of agreement, the Corporation will operate and maintain the Plant and sell electricity generated to the Regulator for a period which covers the substantial useful life of the Plant which may be renewed for such further period as may be mutually agreed upon between the parties. The Corporation will be responsible for any maintenance services during the concession period.

The Corporation in turn has a right to charge the Regulator at the agreed rate as stated in the service concession arrangement.

The fair value towards the construction of the Plant has been recognised as an Intangible Asset and is amortized over the useful life of the asset or period of contract whichever is less.

During the year ended 31st March 2017, the Corporation has earned Nil profit (Previous year Rs.2.42 Crores) from construction of the plant. The Corporation has recognised an intangible asset of Rs.57.82 Crores as at 31st March 2017 (31st March 2016: Rs.61.36 Crores and 1stApril 2015: Rs.16.66 Crores) of which Rs.0.58 Crores (Previous year Rs.0.24 Crores) has been amortized during the period.

Operating leases

A. Leases as lessee

The Corporation enters into cancellable/non-cancellable operating lease arrangements for land, godowns, office premises, staff quarters and others. The lease rentals paid for the same are charged to the Statement of Profit and Loss.

a) The future minimum lease payments under non-cancellable leases payable as at the year ending are as follows:

b) The Corporation enters into cancellable operating leases in respect of land, office premises, staff quarters and others which are cancellable by giving appropriate notices as per respective agreements. During the year Rs.237.20 Crores (Previous year Rs.327.90 Crores) has been charged to Statement of Profit and Loss on account of lease rentals.

B. Leases as lessor

a) The Corporation enters into cancellable/non-cancellable operating lease arrangements in respect of land, commercial spaces, storage distribution facilities, etc. The details are as follows:

b) Total contingent rent recognised as income in the Statement of Profit and Loss during 2016-17 is Rs.25.16 Crores (Previous year Rs.23.20 Crores)

c) The future minimum lease payments under non cancellable leases receivable as at the year ending are as follows:

Finance Lease Leases as lessee

i) The Corporation has finance lease arrangements for various Land leases. The carrying amount of these assets are shown below:

NOTE 6 EMPLOYEE BENEFITS

[A] Post Employment Benefit Plans:

Defined Contribution Scheme

Defined Contribution Scheme (DCS) was introduced effective from 1st January 2007. Corporation contributes at a defined percentage of the employee salary out of the total entitlements on account of superannuation benefits under this scheme. This Fund is maintained under a trust.

Defined Benefit Plans

The Corporation has the following Defined Benefit Plans

Gratuity: The Corporation has a defined benefit gratuity plan managed by a trust. The Trustees administer contributions made to the trust, investments thereof etc. Based on actuarial valuation, the contribution is paid to the trust which is invested in plan assets as per the investment pattern prescribed by the Government. Gratuity is paid to a staff member who has put in a minimum qualifying period of 5 years of continuous service, on superannuation, resignation, termination or to his nominee on death.

Other Defined Benefits: These are (a) Post Retirement Medical Scheme (managed by a trust) to employees, spouse, dependent children and dependent parents;(b) Pension / Ex-Gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life;(c) Death in service / Permanent Disablement benefit given to the spouse of the employee / employee, provided the deceased’s family / disabled employee deposits with the Corporation, retirement dues such as PF, Gratuity, Leave Encashment etc., payable to them; (d) Resettlement allowance paid to employees to permanently settle down at the time of retirement; and (e) The Corporation makes contribution towards Provident Fund, which is administered by the trustees. The Corporation has an obligation to fund any shortfall on the yield of the trust’s investments over the interest rates declared by the Government under EPF scheme.

These defined benefit plans expose the Corporation to actuarial risks, such as longetivity risk, interest rate risk, and market (investment) risk.

The estimates for future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors.

The expected return on plan assets is based on market expectation at the beginning of the period, for returns over the entire life of the related obligation.

[B] Provident Fund:

The Corporation’s contribution to the Provident Fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees’ salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Corporation and charged to Statement of Profit and Loss. The actual return earned by the fund has mostly been higher than the Government specified minimum rate of return in the past years. There is no shortfall in the fund as on 31st March 2017, 31st March 2016 and 1st April 2015.

NOTE 7 RELATED PARTY TRANSACTIONS

a) Names of the Related parties

Joint Venture & Associate Companies

Indraprastha Gas Limited Petronet India Limited *

Petronet CCK Limited #

Petronet CI Limited*

Petronet LNG Limited

Bharat Oman Refineries Limited

Maharashtra Natural Gas Limited

Central UP Gas Limited

Sabarmati Gas Limited

Bharat Stars Services Private Limited

(Including Bharat Stars Services (Delhi) Pvt. Limited)

Bharat Renewable Energy Limited *

Matrix Bharat Pte. Ltd.

Delhi Aviation Fuel Facility Private Limited

Kannur International Airport Limited

GSPL India Gasnet Limited

GSPL India Transco Limited

Mumbai Aviation Fuel Farm Facility Private Limited

Kochi Salem Pipeline Private Limited

IBV (Brazil) Petroleo Ltda.

Brahmaputra Cracker and Polymer Limited DNP Limited

Petroleum India International BPCL-KIAL Fuel Farm Private Limited Haridwar Natural Gas Pvt. Ltd.

Goa Natural Gas Pvt. Ltd.

FINO Paytech Limited

*Companies in the process of winding up

# Petronet CCK Limited has become Subsidiary w.e.f. 29th May 2015

Key Management Personnel :

Shri S. Varadarajan Chairman & Managing Director (Up to 30.09.2016)

Shri D. Rajkumar Chairman & Managing Director (Appointed w.e.f. 01.10.2016)

Shri K. K. Gupta Director (Marketing) (Up to 29.02.2016)

Shri S. Ramesh Director (Marketing) (Appointed w.e.f. 01.03.2016)

Shri B. K. Datta Director (Refineries) (Up to 31.07.2016)

Shri R. Ramachandran Director (Refineries) (Appointed w.e.f. 01.08.2016)

Shri S. P Gathoo Director (Human Resource)

Shri P Balasubramanian Director (Finance)

Shri Neeraj Mittal Govt. Nominee Director (Up to 11.12.2015)

Smt Sushma Taishete Govt. Nominee Director (Appointed w.e.f. 19.05.2015 to 01.01.2016) Shri Anant Kumar Singh Govt. Nominee Director (Appointed w.e.f. 02.01.2016)

Shri P H. Kurian Govt. Nominee Director

Shri J. R. Varma Independent Director (Up to 09.08.2015)

Shri B. Chakrabarti Independent Director (Up to 09.08.2015)

Shri Rajesh Kumar Mangal Independent Director (Appointed w.e.f. 01.12.2015)

Shri Deepak Bhojwani Independent Director (Appointed w.e.f. 01.12.2015)

Shri Gopal Chandra Nanda Independent Director (Appointed w.e.f. 01.12.2015)

Shri Vishal V Sharma Independent Director (Appointed w.e.f. 09.02.2017)

b) The nature wise transactions with the above related parties are as follows:

The outstanding balances are unsecured and are settled in cash except advance against equities which are settled in equity.

c) In the course of its ordinary business, the Corporation enters into transactions with other Government controlled entities (not included in the list above). The Corporation has transactions with other Government-controlled entities, including but not limited to the followings:

- Sales and purchases of goods and ancillary materials;

- Rendering and receiving of services;

- Receipt of dividends;

- Loans and advances;

- Depositing and borrowing money; and

- Uses of public utilities.

These transactions are conducted in the ordinary course of business on terms comparable to those with other entities that are not Government controlled entities.

d) Key management personnel compensation

NOTE 8

Dues from Directors is Rs.0.40 Crores (31st March 2016: Rs.0.35 Crores and 1st April 2015: Rs.0.32 Crores) and Dues from Officers is Rs.4.13 Crores (31st March 2016: Rs.3.98 Crores and 1st April 2015: Rs.3.30 Crores).

The Corporation has elected to continue the policy adopted under previous GAAP for accounting the foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items outstanding as of 31st March 2016 i.e. foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the asset and in other cases, if any, accumulated in “Foreign Currency Monetary Item Translation Difference Account” and amortized over the balance period of the liability. For the current financial year, the impact on account of above (net of depreciation and amortization) is decrease in profit before tax of Rs.165.19 Crores (increase in profit in Previous year Rs.244.01 Crores). The net gain remaining unamortized under Foreign Currency Monetary Item Translation Difference Account as at 31st March 2017 is Rs.206.34 Crores (net loss as at 31st March 2016 Rs.79.28 Crores and net gain of Rs.27.20 Crores as at 1st April 2015).

NOTE 9

Impairment of Assets: It is assumed that suitable mechanism would be in place by the Government of India, in line with earlier/ current year(s), to provide compensation towards under recoveries of margin, if any, and recoveries against Direct Benefit Transfer for LPG Scheme on account of sale of sensitive petroleum products in subsequent years. Hence, there is no indication of impairment of assets of the Corporation as at 31st March 2017.

NOTE 10

In compliance of Ind AS 37 on “Provisions, Contingent Liabilities and Contingent Assets”, the required information is as under:

The above provisions are made based on estimates and the expected timing of outflows is not ascertainable at this stage.

Above includes provision of Rs.62.57 Crores (Previous year Rs.62.47 Crores) in respect of which deposits have been made.

C. Financial risk management

C. i. Risk management framework

The Corporation’s Board of Directors has overall responsibility for the establishment and oversight of the Corporation’s risk management framework. The Risk Management Committee of the Board has defined roles and responsibilities, which includes reviewing and recommending the risk management plan and the risk management report for approval of the Board with the recommendation of the Audit Committee. The Corporation has adopted a Risk Management Charter and Policy for self-regulatory processes and procedures for ensuring the conduct of the business in a risk conscious manner.

The Corporation has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk; and

- Market risk

C.ii. Credit risk

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Corporation’s trade and other receivables, cash and cash equivalents and other bank balances, derivatives and debt securities. The maximum exposure to credit risk in case of all the financial instuments covered below is restricted to their respective carrying amount.

(a) Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to which the Corporation grants credit terms in the normal course of business.

As at 31st March 2017, 31st March 2016 and 1st April 2015, the Corporation’s industrial customers accounted for the majority of the trade receivables.

Expected credit loss assessment for Trade and other receivables from customers as at 1st April 2015, 31st March 2016 and 31st March 2017

The Corporation uses an allowance matrix to measure the expected credit losses of trade and other receivables.

The loss rates are computed using a ‘roll rate’ method based on the probability of receivable progressing through successive stages till full provision for the trade receivable is made. Roll rates are calculated separately for exposures based on common credit risk characteristics for a set of customers.

The following table provides information about the exposure to credit risk and Expected Credit Loss Allowance for trade and other receivables:

(b) Cash and cash equivalents and Other Bank Balances

The Corporation held cash and cash equivalents and other bank balances of Rs.64.69 Crores at 31st March 2017 (31st March 2016: Rs.2,067.35 Crores, 1st April 2015 : Rs.1,360.20 Crores). The cash and cash equivalents are held with banks with good credit ratings and financial institution counterparties with good market standing. Also, Corporation invests its short term surplus funds in bank fixed deposit, Government of India Treasury-bills and liquid schemes of mutual funds, which carry no / low mark to market risks for short duration, therefore does not expose the Corporation to credit risk.

(c) Derivatives

The derivatives are entered into with banks, financial institutions and other counterparties with good credit ratings. Further exposures to counter-parties are closely monitored and kept within the approved limits.

(d) Investment in debt securities

Investment in debt securities are mainly as loans to Subsidiary, Joint Venture companies and investment in Government securites which do not carry any significant credit risk.

C.iii Liquidity risk

Liquidity risk is the risk that the Corporation will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

Liquidity risk is managed by Corporation through effective fund management. The Corporation has obtained fund and non-fund based working capital lines from various banks. Furthermore, the Corporation has access to funds from debt markets through commercial paper programs, foreign currency borrowings and other debt instruments.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments.

* Guarantees issued by the Corporation on behalf of Joint Venture/Subsidiary are with respect to borrowings raised by the respective entity. These amounts will be payable on default by the concerned entity. As of the reporting date, none of the Subsidiary/Joint Venture has defaulted and hence, the Corporation does not have any present obligation to third parties in relation to such guarantees.

C.iv. Market risk

Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

C.iv.a Currency risk

The Corporation is exposed to currency risk on account of its operating and financing activities. The functional currency of the Corporation is Indian Rupee. Our exposure is mainly denominated in U.S. dollars (USD). The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Corporation has put in place a Financial Risk Management Policy to Identify the most effective and efficient ways of managing the currency risks. The Corporation uses derivative instruments (mainly foreign exchange forward contracts) to mitigate the risk of changes in foreign currency exchange rates in line with our policy.

The Corporation do not use derivative financial instruments for trading or speculative purposes.

Exposure to currency risk

The currency profile of financial assets and financial liabilities as at 31st March 2017, 31st March 2016 and 1st April 2015 are as below:

Sensitivity analysis

A reasonably possible strengthening/(weakening) of the USD against INR at 31st March would have affected the measurement of financial instruments denominated in US dollars and affected profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange fluctuation is capitalized to fixed assets or recognised direclty in reserves, the impact indicated below may affect the Corporation’s income statement over the remaining life of the related fixed assets or the remaining tenure of the borrowing respectively.

C.iv.b Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company’s approach to managing interest rate risk is to have a judicious mix of borrowed funds with fixed and floating interest rate obligation.

Exposure to interest rate risk

Corporation’s interest rate risk arises primarily from borrowings. The interest rate profile of the Corporation’s interest-bearing financial instruments is as follows:

Fair value sensitivity analysis for fixed-rate instruments

The Corporation accounts for certain investments in fixed-rate financial assets such as investments in Oil bonds at fair value through profit or loss. Accordingly, a decrease in 25 basis point in interest rates is likely to increase the profit or loss (before tax) for the year ending 31st March 2017 by Rs.80.21 Crores (31st March 2016 Rs.86.34 Crores) and an increase in 25 basis point in interest rates is likely to decrease the profit or loss (before tax) for the year ending 31st March 2017 by Rs.81.76 Crores (31st March 2016 Rs.88.18 Crores).

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 25 basis points in interest rates at the reporting date would have increased/ (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. In cases where the related interest rate risk is capitalized to fixed assets, the impact indicated below may affect the Corporation’s income statement over the remaining life of the related fixed assets.

C.iv.c Commodity rate risk

BPCL’s profitability gets affected by the price differential (also known as Margin or Crack spread) between prices of products (output) and the price of the crude oil and other feed-stocks used in production (input), prices of both are set by markets. Hence BPCL uses derivatives instruments (swaps, futures, options, and forwards) to hedge exposures to commodity price risk to cover refinery operating cost using Basic Swaps on various products cracks like Naphtha, Gasoline (Petrol), Jet/Kerosene, Gasoil (Diesel) and Fuel Oil against Benchmark Dubai Crude. Further volatility in freight costs is hedged through Freight Forwards and bunker purchases. Settlement of all derivative transactions take place on the basis of monthly average of the daily prices of the settlement month quoted by Platts.

BPCL measures market risk exposure arising from its trading positions using value-at-risk techniques. These techniques make a statistical assessment of the market risk arising from possible future changes in market prices over a one-day holding period.

BPCL uses historical model of VAR techniques based on variance/covariance to make a statistical assessment of the market risk arising from possible future changes in market values over a 24-hour period and within a 95% confidence level. The calculation of the range of potential changes in fair value takes into account positions, the history of price movements for last two years and the correlation of these price movements.

C.iv. d Price risk

The Corporation’s exposure to equity investments price risk arises from investments held by the Corporation and classified in the financial statements at fair value through OCI. The corporation intends to hold these investments for long-term for better returns and price risk will not be significant from a long term perspective.

Notes

A. The Corporation has Collaterised Borrowing and Lending Obligations limits from Clearing Corporation of India Limited, which are secured by 6.90% Oil Marketing Companies GOI Special Bonds 2026. As the Counterparty currently does not have a legally enforceable right to off set these amounts, these amounts have not been offset in the balance sheet, but have been presented separately in the table above.

B. The Corporation purchases and sells petroleum products from different Oil Marketing Companies. Under the terms of the agreement, the amounts payable by the Corporation are offset against receivables and only the net amounts are settled. The relevant amounts have therefore been presented net in the balance sheet.

C. The Corporation enters into derivative transactions under the International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other.

D. The Corporation enters into derivative transactions under the International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. The ISDA master netting agreements do not meet the criteria for offsetting in the balance sheet. This is because the Counterparty does not currently have legally enforceable right to offset recognised amounts, because the right to offset is enforceable only on the occurrence of future events.

NOTE 11 CAPITAL MANAGEMENT

The Corporation’s objective is to maximize the shareholders’ value by maintaining an optimum capital structure. Management monitors the return on capital as well as the debt equity ratio and makes necessary adjustments in the capital structure for the development of the business.

The Corporation’s debt to equity ratio as at 31st March, 2017 was 0.78 (31st March 2016: 0.58 and 1st April, 2015: 0.55)

Note: For the purpose of computing debt to equity ratio, equity includes Equity Share Capital and Other Equity and Debt includes Long term borrowings, short term borrowings and current maturities of long term borrowings.

NOTE 12 SEGMENT REPORTING

As per the requirements of Ind AS 108 on “Operating Segments”, segment information has been provided under the Notes to Consolidated Financial Statements.

NOTE 13 SPECIFIED BANK NOTES

The details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 are provided in the Table below:-

Note:

Above excludes Rs.0.22 Crores collected during 9th December 2016 to 11th December 2016 in one of the Company Owned Company Operated Retail Outlet since the same was stolen before depositing into the bank.

NOTE 14

To the extent, the Corporation has received intimation from the “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, the details are provided as under:


Mar 31, 2016

Company Overview

Bharat Petroleum Corporation Limited referred to as "BPCL" or "the Corporation" was incorporated on 3rd November, 1952. BPCL is a Government of India Enterprise listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Corporation is engaged in the business of refining of crude oil and marketing of petroleum products. It has refineries at Mumbai and Kochi, LPG bottling plants and Lube blending plants. The Corporation''s marketing infrastructure includes vast network of Installations, Depots, Retail Outlets, Aviation Service Stations and LPG distributors.

1. Consequent to non-revision in retail selling prices corresponding to the international prices and applicable foreign exchange rates prevailing during the year, the Corporation has suffered gross under-recovery of Rs. 1,796.50 Crores (previous year Rs. 16,140.66 Crores) on sale of sensitive petroleum products.

As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as follows:

a) Rs. 198.01 Crores (previous year Rs. 8,362.88 Crores) discount on crude oil/products purchased from ONGC/GAIL/NRL which has been adjusted against purchase cost;

b) Rs. 1,598.49 Crores (previous year Rs. 7,290.40 Crores) subsidy from Government of India has been accounted as Revenue from operations.

After adjusting the above compensation, the net under-recovery absorbed by the Corporation is Nil (previous year under-recovery Rs. 487.38 Crores).

2. Pursuant to the Ministry of Corporate Affairs Notification G.S.R. 914 (E) dated 29th December 2011, the Corporation had exercised the option under Para 46 A of AS-11 (notified under the Companies (Accounting Standards) Rules, 2006) (as amended) and has changed its accounting policy from FY 2011-12 onwards for recognition of exchange differences arising on reporting of long-term foreign currency monetary items. For the current financial year, the impact on account of this change (net of depreciation and amortization) is increase in profit before tax of Rs. 441.38 Crores (previous year Rs. 307.06 Crores). The net loss remaining unamortised under Foreign Currency Monetary Item Translation Difference Account as at 31st March 2016 is Rs. 79.20 Crores (net gain in the previous year Rs. 26.99 Crores).

3. As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (KRL) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the FY 2006-07. After the 1:1 Bonus issue in July 2012, presently the trust holds 6,74,57,474 equity shares of the Corporation. Accordingly the cost of the original investment of Rs. 659.10 Crores (previous year Rs. 659.10 Crores) together with the additional contribution to the corpus of the trust of Rs. 0.01 Crores made in 2014-15 amounting to Rs. 659.11 Crores is included in Non-Current Investments (Refer Note no. 16). The income distributed by the trust during the year 2015-16 amounting to Rs. 259.71 Crores (previous year Rs. 114.68 crores) have been included in ''Other income'' (Refer Note No. 26).

4. Impairment of Assets: It is assumed that suitable mechanism would be in place by the Government of India, in line with earlier/current year(s), to provide compensation towards under recoveries of margin, if any, and recoveries against Direct Benefit Transfer for LPG Scheme on account of sale of sensitive petroleum products in subsequent years. Hence, there is no indication of impairment of assets of the Corporation as at 31st March 2016.

5. Segment Reporting: As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

6. The Corporation has numerous transactions with other oil companies. The outstanding balances (included under Trade Payables/Trade Receivables, etc) from them including certain other outstanding credit and debit balances are subject to confirmation/reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement and are accounted as and when ascertained.

7. Disclosure as per requirements of Accounting Standard 15 - "Employee Benefits":

The Corporation''s contribution to the Provident Fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Corporation and charged to Statement of Profit and Loss. The fair value of the assets of the Trust is more than the book value.

Gratuity: The Corporation has a defined benefit gratuity plan managed by a trust. The contribution based upon actuarial valuation is paid/payable to a trust which is invested as per investment pattern prescribed by the Government in plan assets. Gratuity is paid to a staff member who has put in a minimum qualifying period of 5 years of continuous service on superannuation, resignation, termination or to his nominee on death. Leave Encashment: The Employees are entitled to accumulate Earned Leave and Sick Leave, which can be availed during the service period. Employees are also allowed to encash the accumulated earned leave during the service period. Further, the accumulated earned leave and sick leave can be encashed by the employees on superannuation, resignation, and termination or by nominee on death.

Other Defined Benefits: These are (a) Post Retirement Medical Scheme Benefit (managed by a trust) to employees, spouse, dependent children and dependent parents; (b) Pension/ex-gratia scheme to the retired employees who are entitled to receive the monthly pension/ex-gratia for life; (c) Death in service/Permanent disablement given to employee, the spouse of the employee, provided the deceased''s family/disabled employee deposits retirement dues such as P F, Gratuity, Leave encashment payable to them with the Corporation; and (d) Resettlement allowance paid to employees to permanently settle down at the time of retirement.

8. Related Party Disclosures as per Accounting Standard 18

Names of the Related parties (Joint Venture Companies)

Indraprastha Gas Limited

Petronet India Limited *

Petronet CCK Limited #

Petronet CI Limited *

Petronet LNG Limited

Bharat Oman Refineries Limited

Maharashtra Natural Gas Limited

Central UP Gas Limited

Sabarmati Gas Limited

Bharat Stars Services Private Limited

(Including Bharat Stars Services (Delhi) Pvt. Limited)

Bharat Renewable Energy Limited *

Matrix Bharat Pte. Ltd.

Delhi Aviation Fuel Facility Private Limited

Kannur International Airport Limited

GSPL India Gasnet Limited

GSPL India Transco Limited

Mumbai Aviation Fuel Farm Facility Private Limited

Kochi Salem Pipeline Private Limited

IBV (Brazil) Petroleo Ltda.

*Companies in the process of winding up

# Petronet CCK Limited has become subsidiary w.e.f. 29th May 2015

Key Management Personnel (Whole time directors):

Shri S. Varadarajan, (Chairman & Managing Director)

Shri P. Balasubramanian, Director (Finance)

Shri K.K. Gupta, Director (Marketing) till 29th February 2016

Shri S. Ramesh, Director (Marketing) w.e.f. 1st March 2016

Shri B.K. Datta, Director (Refineries)

Shri S.P. Gathoo, Director (Human Resources)

Guarantees of USD 150 Million (Rs. 994.99 Crores) and USD 84 Million (Rs. 557.20 Crores) were given to lender banks on behalf of Bharat Oman Refineries Ltd. against foreign currency loans which were refinanced during the year and have been extended to new lender banks.

Disclosure with respect to Related Party Transactions during the year (more than 10% of the total transaction value):

1. Purchase of goods: Bharat Oman Refineries Limited Rs. 25,898.20 Crores (previous year Rs. 29,610.52 Crores) and Petronet LNG Limited Rs. 4,184.69 Crores (previous year Rs. 5,612.34 Crores).

2. Sale of goods: Matrix Bharat Pte. Ltd. Rs. 997.74 Crores (previous year Rs. 2,286.27 Crores), Bharat Oman Refineries Limited Rs. 808.08 Crores (previous year Rs. 661.21 Crores), Sabarmati Gas Limited Rs. 300.28 Crores (previous year Rs. 339.64 Crores) and Indraprastha Gas Limited Rs. 283.19 Crores (previous year Rs. 434.38 Crores)

3. Rendering of Services: Kochi Salem Pipeline Private Limited Rs. 21.93 Crores (previous year Nil), Mumbai Aviation Fuel Farm Private Limited Rs. 14.69 Crores (previous year Nil), Indraprastha Gas Limited Rs. 15.12 Crores (previous year Rs. 7.38 Crores) and Bharat Oman Refineries Limited Rs. 6.49 Crores (previous year Rs. 16.13 Crores)

4. Receiving of Services: Mumbai Aviation Fuel Farm Facility Private Limited Rs. 40.87 Crores (previous year Nil), Bharat Stars Services Private Limited Rs. 29.08 Crores (previous year Rs. 16.70 Crores) and Bharat Oman Refineries Limited Rs. 12.00 Crores (previous year Rs. 11.70 Crores)

5. Interest income: Bharat Oman Refineries Limited Rs. 129.01 Crores (previous year Rs. 129.12 Crores)

6. Dividend received: Petronet LNG Limited Rs. 18.75 Crores (previous year Rs. 18.75 Crores), Indraprastha Gas Limited Rs. 18.90 Crores (previous year Rs. 17.33 Crores) and Delhi Aviation Fuel Facility Pvt. Ltd. Rs. 7.59 Crores (previous year Rs. 7.59 Crores)

7. Investment and Advances for Investments: Sabarmati Gas Limited Rs. 102.24 Crores (previous year Nil), Kannur International Airport Ltd Rs. 50.00 Crores (previous year Rs. 50.00 crores), Kochi Salem Pipeline Private Limited Rs. 37.50 Crores (previous year Rs. 6.75 Crores) and Mumbai Aviation Fuel Farm Facility Private Limited Rs. 33.77 Crores (previous year Rs. 4.50 Crores)

8. Loans and Advances: Petronet LNG Limited Rs. 56.18 Crores (previous year Rs. 112.36 Crores)

9. Management Contracts (Employees on deputation/consultancy services): Bharat Oman Refineries Limited Rs. 15.96 Crores (previous year Rs. 16.46 Crores) and Bharat Stars Services Private Limited Rs. 2.50 Crores (previous year Rs. 1.81 Crores)

10. Lease Rental & Other Charges received: Bharat Oman Refineries Limited Rs. 26.00 Crores (previous year Rs. 29.21 Crores)

11. Lease Rental & Other Charges paid: Delhi Aviation Fuel Facility Private Limited Rs. 0.07 Crores (previous year Rs. 0.07 crores)

12. Sale of Assets: Bharat Stars Services Private Limited Nil (previous year Rs. 3.09 Crores) and Mumbai Aviation Fuel Farm Private Limited Nil (previous year Rs. 1.92 Crores)

13. Receivables as at period end: Bharat Oman Refineries Limited Rs. 1,388.06 Crores (previous year Rs.1,390.18 Crores), which is mainly on account of Subordinated loan of Rs. 1,354.10 Crores (previous year Rs. 1,354.10 Crores) and Petronet LNG Limited of Rs. 200.00 Crores (previous year Rs. 105.22 Crores)

14. Payables as at period end: Bharat Oman Refineries Limited Rs. 908.04 Crores (previous year Rs. 820.38 Crores) and Petronet LNG Limited Rs. 123.76 Crores (previous year Rs. 151.03 Crores)

9. Dues from Directors is Rs. 0.35 Crores (previous year Rs. 0.32 Crores) and Dues from Officers is Rs. 3.98 Crores (previous year Rs. 3.30 Crores).

10. Disclosure for Operating Leases as per Accounting Standard - 19

The Corporation enters into cancellable/non-cancellable operating lease arrangements for office premises, staff quarters and others. The lease rentals paid/received for the same are charged to the Statement of Profit and Loss.

11. (a) The Corporation has on the Balance Sheet date, outstanding forward contracts amounting to USD 228.75 Million (Rs. 1,533.66 Crores) (previous year - USD 184 Million, Rs. 1,152.96 Crores) to hedge foreign currency exposure for payment of crude oil.

(b) The RBI swap transactions outstanding as on 31/03/2014 had matured during 2014-15 and the gain of Rs. 521.14 Crores had been recognised in the Statement of Profit and Loss during the year 2014-15.

(c) The Corporation had raised Swiss Franc (CHF) 200 Million of 3% CHF Bonds 2019 in March 2014, the proceeds of which were swapped into USD 228.29 Million on the same day. The mark to market losses of Rs. 0.58 Crores (previous year Rs. 96.09 Crores) in respect of this CHF-USD Swap transaction have been recognized as expense during 2015-16 based on the concept of prudence and in line with the ICAI announcement of 29th March 2008 on Accounting for Derivatives.

12. The Employee benefits expense for FY 2015-16 include reversal of provisions no longer required Nil (previous year Rs. 657.93 Crores).

13. The Corporation has, in the current year, changed the method of determination of cost of inventories from ''Weighted Average'' to ''First in First Out'' (FIFO) in respect of crude oil and finished products (except lubricants which are continued to be determined at weighted average). This has resulted in increase in value of inventory of crude oil by Rs. 15.30 Crores and finished products including intermediaries by Rs. 167.87 Crores, resulting in corresponding increase in the profit before tax in the current year.

14. During the year, the Corporation has released LPG cylinders for the BPL families as per the scheme of MOPNG. Out of these, in respect of certain connections, the claims on MOPNG towards deposits amounting to Rs. 95.85 Crores are not yet accounted for, pending their approval.

15. Figures of the previous year have been regrouped wherever necessary, to conform to current period presentation.


Mar 31, 2015

1 Company Overview

Bharat Petroleum Corporation Limited referred to as "BPCL' or "the Corporation" was incorporated on 3rd November, 1952. BPCL is a Government of India Enterprise listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Corporation is engaged in the business of refining of crude oil and marketing of petroleum products. It has refineries at Mumbai and Kochi, LPG bottling plants and Lube blending plants. The Corporation's marketing infrastructure includes vast network of Installations, Depots, Retail Outlets, Aviation Service Stations and LPG distributors.

2 i The Corporation has only one class of shares namely equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Corporation, the holders of equity shares will be entitled to receive the remaining assets of the Corporation in proportion to the number of equity shares held.

The Corporation declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

ii During the period ended 31st March 2015, proposed dividend per share is Rs. 22.50 (previous year Rs. 17). The total dividend appropriation for the year ended 31st March 2015 amounted to Rs. 1,921.21 crores (previous year Rs. 1,425.82 crores) including Corporate Dividend Tax of Rs. 294.27 crores (previous year Rs. 196.58 crores)

iii During Financial Year 2012-13, the Corporation had issued Bonus Shares in the ratio of 1:1 by capitalisation of General Reserve. The total number of Bonus Shares issued is 36,15,42,124 equity shares having face value of Rs. 10 each.

3. Consequent to non-revision in Retail Selling Prices corresponding to the international prices and applicable foreign exchange rates prevailing during the year, the Corporation has suffered gross under-recovery of Rs. 16,140.66 Crores (previous year Rs. 34,462.56 Crores) on sale of sensitive petroleum products.

As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as follows:

a) Rs. 8,362.88 Crores (previous year Rs. 15,576.78 Crores) discount on crude oil / products purchased from ONGC/ GAIL/NRL which has been adjusted against purchase cost;

b) Rs. 7,290.40 Crores (previous year Rs. 18,374.28 Crores) subsidy from Government of India has been accounted as Revenue from operations.

After adjusting the above compensation, the net under-recovery absorbed by the Corporation is Rs. 487.38 Crores (previous year Rs. 511.50 Crores).

4. Pursuant to the Ministry of Corporate Affairs Notification G.S.R. 914 (E) dated 29th December 2011, the Corporation had exercised the option under Para 46 A of AS-11 (notified under the Companies (Accounting Standards) Rules, 2006) (as amended) and has changed its accounting policy from financial year 2011-12 onwards for recognition of exchange differences arising on reporting of long term foreign currency monetary items. For the current financial year, the impact on account of this change (net of depreciation and amortization) is increase in profit before tax of Rs. 307.06 Crores (previous year Rs. 209.76 Crores). The net gain remaining unamortised under Foreign Currency Monetary Item Translation Difference Account as at 31st March 2015 is Rs. 26.99 Crores (previous year Rs. 184.25 Crores).

5. As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (KRL) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the financial year 2006-07. After the 1:1 Bonus issue in July 2012, presently the trust holds 6,74,57,474 equity shares of the Corporation. Accordingly the cost of the original investment of Rs. 659.10 Crores and contribution to the corpus of the trust of Rs. 0.01 Crores (previous year NIL) is included in Non Current Investments (Refer Note No.16). The income distributed by the trust during the year 2014-15 amounting to Rs. 114.68 Crores (previous year Rs. 74.20 crores) have been included in 'Other income' (Refer Note No.26).

6. Impairment of Assets: It is assumed that suitable mechanism would be in place by the Government of India, in line with earlier/ current year(s), to provide compensation towards under-recoveries of margin, if any, and recoveries against Direct Benefit Transfer for LPG Scheme on account of sale of sensitive petroleum products in subsequent years. Hence, there is no indication of impairment of assets of the Corporation as at 31st March 2015.

7. Segment Reporting: The Corporation operates in a single segment - Refinery and Marketing activities, i.e. downstream petroleum sector. Considering the nature of business and operation, there is no reportable segment (business and/or geographical) in accordance with the requirements of Accounting Standard 17.

8. The Corporation has numerous transactions with other oil companies. The outstanding balances (included under Trade Payables / Trade Receivables, etc) from them including certain other outstanding credit and debit balances are subject to confirmation/reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement and are accounted as and when ascertained.

9. Disclosure as per requirements of Accounting Standard 15 - "Employee Benefits":

The Corporation's contribution to the Provident Fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Corporation and charged to Statement of Profit and Loss.

Gratuity: The Corporation has a defined benefit gratuity plan managed by a trust. The contribution based upon actuarial valuation is paid /payable to a trust which is invested as per investment pattern prescribed by the Government in plan assets. Gratuity is paid to a staff member who has put in a minimum qualifying period of 5 years of continuous service on superannuation, resignation, termination or to his nominee on death.

Leave Encashment: The Employees are entitled to accumulate Earned Leave and Sick Leave, which can be availed during the service period. Employees are also allowed to encash the accumulated earned leave during the service period. Further, the accumulated earned leave and sick leave can be encashed by the employees on superannuation, resignation, and termination or by nominee on death.

Other Defined Benefits: These are (a) Post Retirement Medical Scheme benefit (managed by a trust) to employees, spouse, dependent children and dependent parents; (b) Pension/ex-gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life; (c) Death in service / Permanent disablement given to employee, the spouse of the employee, provided the deceased's family/disabled employee deposits retirement dues such as PF, Gratuity, Leave encashment payable to them with the Corporation; and (d) Resettlement allowance paid to employees to permanently settle down at a place other than the location of last posting at the time of retirement.

10 Related Party Disclosures as per Accounting Standard 18 Names of the Related parties (Joint Venture Companies)

Indraprastha Gas Limited Petronet India Limited *

Petronet CCK Limited Petronet CI Limited *

Petronet LNG Limited

Bharat Oman Refineries Limited

Maharashtra Natural Gas Limited

Central UP Gas Limited

Sabarmati Gas Limited

Bharat Stars Services Private Limited

(Including Bharat Star Services (Delhi) Pvt. Limited)

Bharat Renewable Energy Limited *

Matrix Bharat Pte. Ltd.

Delhi Aviation Fuel Facility Private Limited

Kannur International Airport Limited

GSPL India Gasnet Limited

GSPL India Transco Limited

Mumbai Aviation Fuel Farm Facility Private Limited

Kochi Salem Pipeline Private Limited

IBV (Brazil) Petroleo Ltda.

*Companies in the process of winding up

Key Management Personnel (Whole time directors):

Shri S. Varadarajan, (Chairman & Managing Director) w.e.f. 01/10/2013 and (Director Finance) up to 31/03/2014 Shri P Balasubramanian, Director (Finance) w.e.f. 01/04/2014 Shri K.K. Gupta, Director (Marketing)

Shri B.K. Datta, Director (Refineries)

Shri S.P Gathoo, Director (Human Resources)

Shri R.K. Singh, (Chairman & Managing Director) up to 30/09/2013

1. Purchase of goods: Bharat Oman Refineries Limited Rs. 29,610.52 Crores (previous year Rs. 30,971.47 Crores) and Petronet LNG Limited Rs. 5,612.34 Crores (previous year Rs. 6,018.80 Crores).

2. Sale of goods: Matrix Bharat Pte. Ltd. Rs. 2,286.27 Crores (previous year Rs. 4,676.70 Crores), Bharat Oman Refineries Limited Rs. 661.21 Crores (previous year Rs. 1,158.61 Crores) and Indraprastha Gas Limited Rs. 434.38 Crores (previous year Rs. 570.37 Crores)

3. Rendering of Services: Bharat Oman Refineries Limited Rs. 16.13 Crores (previous year Rs. 24.71 Crores) and Indraprastha Gas Limited Rs. 7.38 Crores (previous year Rs. 4.57 Crores)

4. Receiving of Services: Petronet CCK Limited Rs. 108.45 Crores (previous year Rs. 104.39 Crores) and Bharat Star Services Private Limited Rs. 16.70 Crores (previous year Rs. 11.68 Crores)

5. Interest income: Bharat Oman Refineries Limited Rs. 129.12 Crores (previous year Rs. 128.96 Crores)

6. Dividend received: Petronet LNG Limited Rs. 18.75 Crores (previous year Rs. 23.44 Crores), Indraprastha Gas Limited Rs. 17.33 Crores (previous year Rs. 17.33 Crores) and Delhi Aviation Fuel Facility Pvt. Ltd. Rs. 7.59 Crores (previous year Rs. 7.28 Crores)

7. Investment and Advances for Investments: Kannur International Airport Ltd. Rs. 50.00 Crores (previous year Rs. 30.00 crores)

8. Loans and Advances: Petronet LNG Limited Rs. 112.36 Crores (previous year Rs. 56.18 Crores )

9. Management Contracts (Employees on deputation / consultancy services): Bharat Oman Refineries Limited Rs. 16.46 Crores (previous year Rs. 16.75 Crores)

10. Lease Rental & other charges received: Bharat Oman Refineries Limited Rs. 29.21 Crores (previous year Rs. 29.21 Crores)

11. Lease Rental & Other Charges paid: Delhi Aviation Fuel Facility Pvt. Ltd Rs. 0.07 Crores (previous year Rs. 0.21 crores).

12. Sale of Assets: Bharat Star Services Pvt. Limited Rs. 3.09 Crores (previous year Nil) and Mumbai Aviation Fuel Farm Facility Private Limited Rs. 1.92 Crores (previous year Nil).

13. Receivables as at period end: Bharat Oman Refineries Limited Rs. 1,390.18 Crores (previous year Rs. 1,385.83 Crores), which is mainly on account of Subordinated loan of Rs. 1,354.10 Crores (previous year Rs. 1,354.10 Crores).

14. Payables as at period end: Bharat Oman Refineries Limited Rs. 820.38 Crores (previous year Rs. 1,592.05 Crores) and Petronet LNG Limited Rs. 151.03 Crores (previous year Rs. 255.54 Crores)

11. Dues from Directors is Rs. 0.32 Crores (previous year Rs. 0.25 Crores) and Dues from Officers is Rs. 3.30 Crores (previous year Rs. 3.74 Crores).

12. Disclosure for Operating Leases as per Accounting Standard - 19 The Corporation enters into cancellable/ non-cancellable operating lease arrangements for office premises, staff quarters and others. The lease rentals paid/ received for the same are charged to the Statement of Profit and Loss.

13. In compliance with Accounting Standard - 27 'Financial Reporting of Interests in Joint Ventures', the required information is as under:

14. Capital Commitments and Contingent Liabilities :

Rs. in Crores

31/03/2015 31/03/2014

(a) Capital Commitments :

i) Estimated amount of contracts remaining to be executed on 7,877.49 9,662.74 capital account and not provided for

ii) Uncalled liability on shares and other investments partly paid 50.00 100.00

(b) Contingent Liabilities :

In respect of Income Tax matters 80.68 84.13 Other Matters :

i) Claims against the Corporation not acknowledged as debts * : Excise, Service Tax and Customs matters 1,093.13 1,146.12

Sales tax matters 6,526.43 3,191.77

Land Acquisition cases for higher compensation 121.05 139.87

Others 441.42 399.02

* These include Rs. 4,163.89 Crores (previous year Rs. 1,065.60 Crores) against which the Corporation has a recourse for recovery and Rs. 49.93 Crores (previous year Rs. 75.55 Crores) which are on capital account.

ii) Claims on account of wages, bonus/ex-gratia payments in respect 15.95 13.28 of pending court cases.

iii) Guarantees given on behalf of Subsidiaries/JV's 2,698.04 2,661.06

15. (a) The Corporation has on the Balance Sheet date, outstanding forward contracts amounting to USD 184 Million, of which Nil (previous year USD 175 Million i.e. an equivalent of Rs. 1,051.75 Crores) is to hedge the foreign currency exposure towards loans and USD 184 Million i.e. an equivalent of Rs. 1,152.96 Crores (previous year Nil) to hedge foreign currency exposure for payment of crude oil.

(b) The Corporation has on the Balance Sheet date, outstanding forward contracts amounting to Nil (previous year USD 1,229 Million equivalent to Rs. 7,386.27 Crores) to hedge the foreign currency exposure arising out of RBI Swap window transactions. All the RBI swap transactions outstanding as on 31/03/14 have matured during 2014-15 and the gain of Rs. 521.14 Crores (out of which Rs. 324.35 Crores is on account of reversal of mark to market losses accounted in previous years) have been recognised in the Statement of Profit and Loss.

(c) The Corporation had raised Swiss Franc (CHF) 200 Million of 3% CHF Bonds 2019 in March 2014, the proceeds of which were swapped into USD 228.29 Million on the same day. The mark to market losses of Rs. 96.09 Crores (previous year Rs. 15.41 Crores) in respect of this CHF-USD Swap transaction have been recognized as expense during 2014-15 based on the concept of prudence and in line with the ICAI announcement of 29th March 2008 on Accounting for Derivatives.

(d) The Corporation has on the Balance Sheet date the following outstanding derivatives for hedging purposes:

Instrument Description Quantity

OTC Swap Spread between Petroleum 3.20 million Products and Crude Oil barrels

Mark-to-market losses amounting to Rs. 0.01 Crores have been accounted as on 31st March 2015 (previous year Nil) in respect of these derivative contracts.

16. The Employee benefits expense for financial year 2014-15 include reversal of provisions no longer required Rs. 657.93 Crores.

17. Figures of the previous year have been regrouped wherever necessary, to conform to current period presentation.


Mar 31, 2014

Company Overview

Bharat Petroleum Corporation Limited referred to as "BPCL" or "the Corporation" was incorporated on 3rd November, 1952. BPCL is a Government of India Enterprise listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Corporation is engaged in the business of refining of crude oil and marketing of petroleum products. It has refineries at Mumbai and Kochi, LPG bottling plants and Lube blending plants. The Corporation''s marketing infrastructure includes vast network of Installations, Depots, Retail Outlets, Aviation Service Stations and LPG distributors.

1. Consequent to non-revision in Retail Selling Prices corresponding to the international prices and applicable foreign exchange rates prevailing during the year, the Corporation has suffered gross under-recovery of Rs. 34,462.56 crores (previous year Rs. 38,990.43 crores) on sale of sensitive petroleum products.

As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as follows:

a) Rs. 15,576.78 crores (previous year Rs.16,844.49 crores) discount on crude oil / products purchased from ONGC/ GAIL/NRL which has been adjusted against purchase cost;

b) Rs. 18,374.28 crores (previous year Rs. 21,896.65 crores) subsidy from Government of India has been accounted as Revenue from operations.

After adjusting the above compensation, the net under-recovery absorbed by the Corporation is Rs. 511.50 crores (previous year Rs. 249.29 crores).

2. Pursuant to the Ministry of Corporate Affairs Notification G.S.R. 914 (E) dated 29th December 2011, the Corporation had exercised the option under Para 46 A of AS-11 (notified under the Companies (Accounting Standards) Rules, 2006) (as amended) and has changed its accounting policy from financial year 2011-12 onwards for recognition of exchange differences arising on reporting of long term foreign currency monetary items. For the current financial year, the impact on account of this change (net of depreciation and amortization) is increase in profit before tax of Rs. 209.76 crores (previous year Rs. 100.31 crores). The net gain remaining unamortised under Foreign Currency Monetary Item Translation Difference Account as at 31st March 2014 is Rs. 184.25 crores (previous year Nil).

3. As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (KRL) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the financial year 2006-07. After the 1:1 Bonus issue in July 2012, presently the trust holds 6,74,57,474 equity shares of the Corporation. Accordingly the cost of the original investment of Rs. 659.10 crores is included in Non Current Investments (Refer Note no.16). The income distributed by the trust during the year 2013-14 amounting to Rs. 74.20 crores (previous year Rs. 37.10 crores) have been included in ''Other income'' (Refer Note No.26).

4. Impairment of Assets: It is assumed that suitable mechanism would be in place, in line with earlier / current year(s), to provide compensation towards under-recoveries of margin, if any, on account of sale of sensitive petroleum products in subsequent years. Hence, there is no indication of impairment of assets of the Corporation as at 31st March 2014.

5. Segment Reporting: The Corporation operates in a single segment - Refinery and Marketing activities, i.e. downstream petroleum sector. Considering the nature of business and operation, there is no reportable segment (business and/ or geographical) in accordance with the requirements of Accounting Standard 17.

6. The Corporation has numerous transactions with other oil companies. The outstanding balances from them including certain other outstanding credit and debit balances are subject to confirmation/reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement and are accounted as and when ascertained.

7. Disclosure as per requirements of Accounting Standard 15 - "Employee Benefits" :

The Corporation''s contribution to the Provident Fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employee''s salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Corporation and charged to Statement of Profit and Loss.

Gratuity: The Corporation has a defined benefit gratuity plan managed by a trust. The contribution based upon actuarial valuation is paid / payable to a trust which is invested as per investment pattern prescribed by the Government in plan assets. Gratuity is paid to a staff member who has put in a minimum qualifying period of 5 years of continuous service on superannuation, resignation, termination or to his nominee on death. Leave Encashment: The Employees are entitled to accumulate Earned Leave and Sick Leave, which can be availed during the service period. Employees are also allowed to encash the accumulated earned leave during the service period. Further, the accumulated earned leave and sick leave can be encashed by the employees on superannuation, resignation and termination or by nominee on death.

Other Defined Benefits: These are (a) Post Retirement Medical Scheme benefit (managed by a trust) to employees, spouse, dependent children and dependent parents; (b) Pension/ex-gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life; (c) Death in service / Permanent disablement given to employee, the spouse of the employee, provided the deceased''s family/disabled employee deposits retirement dues such as Provident Fund, Gratuity, Leave encashment payable to them with the Corporation; and (d) Resettlement allowance paid to employees to permanently settle down at a place other than the location of last posting at the time of retirement.

8. Related Party Disclosures as per Accounting Standard 18 Names of the Related parties (Joint Venture Companies)

Indraprastha Gas Limited

Petronet India Limited *

Petronet CCK Limited

Petronet CI Limited *

Petronet LNG Limited

Bharat Oman Refineries Limited

Maharashtra Natural Gas Limited

Central UP Gas Limited

Sabarmati Gas Limited

Bharat Stars Services Private Limited

Bharat Renewable Energy Limited

Matrix Bharat Pte. Ltd.

Delhi Aviation Fuel Facility Private Limited

Kannur International Airport Limited

GSPC India Gasnet Limited

GSPC India Transco Limited

IBV (Brazil) Petroleo Ltda.

*Companies under liquidation

Disclosure with respect to Related Party Transactions during the year (more than 10% of the total transaction value) :

1. Purchase of Goods: Bharat Oman Refineries Limited Rs. 30,971.47 Crores (previous year Rs. 26,625.92 Crores) and Petronet LNG Limited Rs. 6,018.80 Crores (previous year Rs. 5,095.69 Crores).

2. Sale of Goods: Matrix Bharat Pte. Ltd. Rs. 4,676.70 Crores (previous year Rs. 2,187.47 Crores) and Bharat Oman Refineries Limited Rs. 1,158.61 Crores (previous year Rs. 6,090.64 Crores).

3. Rendering of Services: Bharat Oman Refineries Limited Rs. 24.71 Crores (previous year Rs. 46.67 Crores) and Indraprastha Gas Limited Rs. 4.57 Crores (previous year Rs. 1.17 Crores)

4. Receiving of Services: Petronet CCK Limited Rs. 104.39 Crores (previous year Rs. 101.59 Crores) and Petronet LNG Limited Rs. 13.25 Crores (previous year Nil)

5. Interest Income: Bharat Oman Refineries Limited Rs. 128.96 Crores (previous year Rs. 186.93 Crores)

6. Dividend Received: Petronet LNG Limited Rs. 23.44 Crores (previous year Rs. 23.44 Crores), Indraprastha Gas Limited Rs. 17.33 Crores (previous year Rs. 15.75 Crores) and Delhi Aviation Fuel Facility Private Limited Rs. 7.28 Crores (previous year Rs. 15.17 Crores)

7. Investment and Advances for Investments: Kannur International Airport Limited Rs. 30.00 Crores (previous year Rs. 40.00 crores), GSPL India Gasnet Limited Rs. 8.72 Crores (previous year Rs. 8.48 crores) and GSPL India Transco Limited Rs. 8.41 Crores (previous year Rs. 7.70 crores)

8. Loans and Advances: Petronet LNG Limited Rs. 56.18 Crores (previous year NIL)

9. Management Contracts (Employees on deputation / consultancy services): Bharat Oman Refineries Limited Rs. 16.75 Crores (previous year Rs. 18.39 Crores)

10. Lease Rental & Other Charges received: Bharat Oman Refineries Limited Rs. 29.21 Crores (previous year Rs. 29.26 Crores)

11. Lease Rental & Other Charges paid: Delhi Aviation Fuel Facility Private Limited Rs. 0.21 Crores (previous year Rs. 0.15 crores) and Bharat Star Services Private Limited Rs. 0.08 Crores (previous year Nil)

12. Receivables as at period end: Bharat Oman Refineries Limited Rs. 1,385.83 Crores (previous year Rs. 1,557.58 Crores), which is mainly on account of Subordinated loan of Rs. 1,354.10 Crores (previous year Rs. 1,354.10 Crores) and Matrix Bharat Pte. Ltd. Rs. 309.77 Crores (previous year Rs. 31.94 Crores)

13. Payable as at period end: Bharat Oman Refineries Limited Rs. 1,592.05 Crores (previous year Rs. 1,950.30 Crores) and Petronet LNG Limited Rs. 255.54 Crores (previous year Rs. 214.75 Crores)

Key Management Personnel (Whole time directors):

Shri S. Varadarajan, (Chairman & Managing Director) w.e.f. 01.10.2013 and Director (Finance) up to 31.03.2014

Shri R.K. Singh, (Chairman & Managing Director) up to 30.09.2013

Shri K.K. Gupta, Director (Marketing)

Shri B.K. Datta, Director (Refineries)

Shri S.P. Gathoo, Director (Human Resources)

9. Dues from Directors is Rs. 0.25 Crores (previous year Rs. 0.34 Crores) and Dues from Officers is Rs. 3.74 Crores (previous year Rs. 3.93 Crores).

10. Disclosure for Operating Leases as per Accounting Standard 19

The Corporation has entered into cancellable operating lease arrangements for office premises, staff quarters and others. The lease rentals paid for the same are charged to the Statement of Profit and Loss. The other disclosures as required under para 25 of Accounting Standard 19 are in the process of compilation.

11. Capital Commitments and Contingent Liabilities :

Rs. in Crores

31/03/2014 31/03/2013

(a) Capital Commitments :

i) Estimated amount of contracts remaining to be executed on 9,662.74 2,333.00 capital account and not provided for

ii) Uncalled liability on shares and other investments partly paid 100.00 130.00

(b) Contingent Liabilities :

i) In respect of Income Tax matters 84.13 112.87

ii) Other Matters :

(a) Claims against the Corporation not acknowledged as debts * :

Excise, Service Tax and Customs matters 1,146.12 867.85

Sales Tax matters 3,191.77 2,863.14

Land Acquisition cases for higher compensation 139.87 156.02

Others 399.02 295.26

* These include ~ 1,065.60 crores (previous year" 725.54 crores) against which the Corporation has a recourse for recovery and" 75.55 crores (previous year" 28.35 crores) which are on capital account.

(b) Claims on account of wages, bonus/ex-gratia payments in 13.28 15.36 respect of pending court cases.

(c) Guarantees given on behalf of Subsidiaries/JV''s 2,661.06 4,694.44

12.(a) The Corporation has on the Balance Sheet date, outstanding forward contracts amounting to USD 175 Million i.e. an equivalent of Rs. 1,051.75 crores (previous year USD 1,718.46 Million i.e. an equivalent of Rs. 9,346.58 crores) to hedge the foreign currency exposure towards loans. The Corporation also hedges the currency risks on account of foreign exposure for the payment of crude oil. However, there are no outstanding forward contracts for hedging the currency risks on account of foreign exposure for the payment of crude oil for the year ending 31st March 2014.

(b) The Corporation has on the Balance Sheet date, outstanding forward contracts amounting to USD 1,229 Million i.e. an equivalent of Rs. 7,386.27 Crores (previous year USD Nil) to hedge the foreign currency exposure arising out of RBI Swap window transactions; Total RBI Swap window transactions entered in financial year 2013-14 for USD 2,163 Million out of which USD 934 Million have been settled in financial year 2013-14.

(c) In line with the ICAI announcement of 29th March 2008 on Accounting for Derivatives and based on the concept of prudence, the mark to market losses of Rs. 324.35 Crores on the outstanding forward contracts in respect of RBI Swap window transactions (Refer Note No. 49 (b) above) has been recognised as expense and included under ''Loss on Foreign currency transactions and translations'' (Refer Note No. 32) while the mark to market gains on the RBI Swap window transactions amounting to Rs. 521.14 Crores have not been recognized. Further, the Corporation has raised Swiss Franc (CHF) 200 Million of 3% CHF Bonds 2019 on 20th March 2014, the proceeds of which were swapped into USD 228.29 Million on the same day. The mark to market losses of Rs. 15.41 Crores in respect of this CHF-USD Swap transaction have also been recognized as expense and included under ''Loss on Foreign currency transactions and translations'' (Refer Note No. 32)

(d) The Corporation has on the Balance Sheet date the following outstanding derivatives for hedging purposes:

13. Figures of the previous year have been regrouped wherever necessary, to conform to current period presentation.


Mar 31, 2013

Company Overview

Bharat Petroleum Corporation Limited referred to as "BPCL" or "the Corporation" was incorporated on 3rd November, 1952. BPCL is a Government of India Enterprise listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Corporation is engaged in the business of refining of crude oil and marketing of petroleum products. It has refineries at Mumbai and Kochi, LPG bottling plants and Lube blending plants. The Corporation''s marketing infrastructure includes a vast network of Installations, Depots, Retail Outlets, Aviation Service Stations and LPG distributors.

1. Consequent to non-revision in Retail Selling Prices corresponding to the international prices and applicable foreign exchange rates prevailing during the year, the Corporation has suffered Gross Under-recovery of Rs. 38,990.43 crores (previous year Rs. 32,638.27 crores) on sale of sensitive petroleum products.

As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as follows:

a) Rs. 16,844.49 crores (previous year Rs. 12,957.20 crores) discount on crude oil/products purchased from ONGC/GAIL/NRL which has been adjusted against Purchase cost;

b) Rs. 21,896.65 crores (previous year Rs. 19,671.39 crores) subsidy from Government of India has been accounted as Revenue from operations.

After adjusting the above Compensation, the net under-recovery absorbed by the Corporation is Rs. 249.29 crores (previous year Rs. 9.68 crores).

2. Pursuant to the Ministry of Corporate Affairs Notification G.S.R. 914 (E) dated 29th December 2011, the Corporation had exercised the option under Para 46 A of AS-11 (notified under the Companies (Accounting Standards) Rules, 2006) and has changed its accounting policy in 2011-12 for recognition of exchange differences arising on reporting of long term foreign currency monetary items. For the current financial year, the impact on account of this change (net of depreciation) is increase in profit before tax of Rs. 100.31 crores (previous year Rs. 110.58 crores).

3. As per the scheme of amalgamation of the erstwhile Kochi Refineries Limited (KRL) with the Corporation which was approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the financial year 2006-07. After the 1:1 Bonus issue in July 2012 , presently the trust holds 6,74,57,474 equity shares of the Corporation. Accordingly the cost of the original investment of Rs. 659.10 crores is included in Note No.16- Non Current Investments. The income distributed by the trust during the year 2012-13 amounting to Rs. 37.10 crores (previous year Rs. 47.22 crores) have been included in ''Other income'' in Note No. 26.

One shareholder of erstwhile KRL has challenged the amalgamation before Delhi High Court, which is pending adjudication.

4. Short/(Excess) provision for earlier years accounted in current year includes MAT Credit Entitlement of Rs. 36.37 crores pertaining to assessment year 2012-13.

5. Impairment of Assets: It is assumed that a suitable mechanism would be in place, in line with earlier/ current year(s), to provide compensation towards under recoveries of margin, if any, on account of sale of sensitive petroleum products in subsequent years. Hence, there is no indication of impairment of assets of the Corporation. Accordingly, impairment is not considered as at 31st March 2013.

6. Segment Reporting: The Corporation operates in a single segment - Refinery and Marketing activities, i.e. downstream petroleum sector. Considering the nature of business and operation, there is no reportable segment (business and/or geographical) in accordance with the requirements of Accounting Standard 17.

7. The Corporation has numerous transactions with other oil companies. The outstanding balances from them including certain other outstanding credit and debit balances are subject to confirmation/reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement and are accounted as and when ascertained.

8. Disclosure as per requirements of Accounting Standard 15 - "Employee Benefits" :

The Corporation''s contribution to the Provident Fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employee''s salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Corporation and charged to Statement of Profit and Loss.

Gratuity: The Corporation has a defined benefit gratuity plan managed by a trust. The contribution based upon actuarial valuation is paid /payable to a trust which is invested as per investment pattern prescribed by the Government in plan assets. Gratuity is paid to the Staff member who has put in a minimum qualifying period of five years of continuous service on superannuation, resignation, termination or to his nominee on death.

Leave Encashment: The employees are entitled to accumulate Earned Leave and Sick Leave, which can be availed during the service period. Employees are also allowed to encash the accumulated earned leave during the service period. Further, the accumulated earned leave and sick leave can be encashed by the employees on superannuation, resignation, and termination or by nominee on death.

Other Defined Benefits: These are (a) Post Retirement Medical Scheme benefit (managed by a trust) to employees, spouse, dependent children and dependent parents; (b) Pension/ex-gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life; (c) Death in service / Permanent disablement given to employee, the spouse of the employee, provided the deceased''s family/disabled employee deposits retirement dues such as PF, Gratuity, Leave encashment payable to them with the Corporation; and (d) Resettlement allowance paid to employees to permanently settle down at a place other than the location of last posting at the time of retirement.

9. Related Party Disclosures as per Accounting Standard 18 Names of the Related parties (Joint Venture Companies):

Indraprastha Gas Limited

Petronet India Limited

Petronet CCK Limited

Petronet CI Limited

Petronet LNG Limited

Bharat Oman Refineries Limited

Maharashtra Natural Gas Limited

Central UP Gas Limited

Sabarmati Gas Limited

Bharat Stars Services Private Limited

Bharat Renewable Energy Limited

Matrix Bharat Pte. Ltd.

Delhi Aviation Fuel Facility Private Limited

Kannur International Airport Limited

GSPC India Gasnet Limited

GSPC India Transco Limited

IBV (Brazil) Petroleo Pvt Ltda.

Disclosure with Respect of Material Related Party Transactions during the Year:

1. Purchase of goods includes mainly Bharat Oman Refineries Limited Rs. 26,625.92 crores (previous year Rs. 8,331.42 crores) and Petronet LNG Limited Rs. 5,095.69 crores (previous year Rs. 3,105.31 crores).

2. Sale of goods includes mainly Bharat Oman Refineries Limited Rs. 6,090.64 crores (previous year Rs. 9,932.89 crores) and Matrix Bharat Pte. Ltd. Rs. 2,187.47 crores (previous year Rs. 2,160.13 crores).

3. Sale of Fixed Assets includes mainly Delhi Aviation Fuel Facility Private Limited NIL (previous year Rs. 95.05 crores).

4. Rendering of Services includes mainly Bharat Oman Refineries Limited Rs. 46.67 crores (previous year Rs.16.02 crores).

5. Receiving of Services includes Petronet CCK Limited Rs. 101.59 crores (previous year Rs. 69.50 crores) and Bharat Stars Services Private Limited Rs. 10.61 crores (previous year Rs. 11.55 crores)

6. Interest Income includes mainly Bharat Oman Refineries Limited Rs. 186.93 crores (previous year Rs. 155.77 crores).

7. Dividend received includes mainly Petronet LNG Limited Rs. 23.44 crores (previous year Rs. 18.75 crores), Indraprastha Gas Limited Rs. 15.75 crores (previous year Rs. 15.75 crores), Delhi Aviation Fuel Facility Private Limited Rs. 15.17 crores (previous year NIL).

8. Investment and Advances for Investments includes mainly Bharat Oman Refineries Limited Rs. 650.00 crores (previous year NIL), Kannur International Airport Limited Rs. 40.00 crores (previous year NIL), GSPL India Gasnet Limited Rs. 8.48 crores (previous year NIL),GSPL India Transco Limited Rs. 7.70 crores (previous year NIL).

9. Loans and Advances includes mainly Petronet CCK Limited Rs. 30.36 crores (previous year Rs. 29.97 crores)

10. Management Contracts (Employees on Deputation) includes mainly Bharat Oman Refineries Limited Rs. 18.39 crores (previous year Rs.15.79 crores).

11. Lease Rental & Other Charges received includes mainly Bharat Oman Refineries Limited Rs. 29.26 crores (previous year Rs. 45.58 crores) and Bharat Star Services Private Limited Rs. 0.31 crores (previous year Rs. 1.69 crores).

12. Lease Rental & Other Charges paid includes mainly Delhi Aviation Fuel Facility Private Limited Rs. 0.15 crores (previous year NIL).

13. Receivables as at period end includes mainly Bharat Oman Refineries Limited Rs. 1,557.58 crores (previous year Rs. 4,569.73 crores), which is mainly on account of Subordinated loan of Rs. 1354.10 crores (previous year Rs. 1354.10 crores) and Sabarmati Gas Limited Rs. 35.36 crores (previous year Rs. 34.99 crores).

14. Payables as at period end includes mainly Bharat Oman Refineries Limited Rs. 1,950.30 crores (previous year Rs. 734.73 crores) and Petronet LNG Limited Rs. 214.75 crores (previous year Rs. 158.91 crores).

Key Management Personnel (Whole time Directors): Shri R.K. Singh (Chairman & Managing Director)

Shri K.K. Gupta, Director (Marketing)

Shri B.K. Datta, Director (Refineries)

Shri S. Varadarajan, Director (Finance)

Shri S.P Gathoo, Director (Human Resources)

10. Dues from Directors is Rs. 0.34 crores (previous year Rs. 0.43 crores) and Dues from Officers is Rs. 3.93 crores (previous year Rs. 3.49 crores).

11. (a) The Corporation has on the Balance Sheet date, outstanding forward contracts amounting to USD 1,718.46 Million i.e. an equivalent of Rs. 9,346.58 crores (previous year USD 1,857.51 Million i.e. an equivalent of Rs. 9,502.38 crores) to hedge the foreign currency exposure towards loans; this includes Nil (previous year Nil ) in respect of long term loans. The Corporation is now hedging the currency risks on account of foreign exposure for the payment of crude oil. However, there are no outstanding forward contracts for hedging the currency risks on account of foreign exposure for the payment of crude oil for the period ending 31st March 2013.

(b) The Corporation has on the Balance Sheet date the following outstanding derivatives for hedging purposes:

12. Figures of the previous year have been regrouped wherever necessary, to confirm to current period presentation.


Mar 31, 2012

Company Overview

Bharat Petroleum Corporation Limited referred to as "BPCL' or "the Corporation" was incorporated on 3rd November, 1952.

BPCL is a Government of India Enterprise listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Corporation is engaged in the business of refining of crude oil and marketing of petroleum products. It has refineries at Mumbai and Kochi, LPG bottling plants and Lube blending plants. The Corporation's marketing infrastructure includes a vast network of Installations, Depots, Retail Outlets, Aviation Service Stations and LPG distributors.

i The Corporation has only one class of shares namely equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Corporation, the holders of equity shares will be entitled to receive the remaining assets of the Corporation in proportion to the number of equity shares held.

The Corporation declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of dividend per share is Rs. 11 (previous year Rs. 14). The total dividend appropriation for the year ended 31st March 2012 amounted to Rs. 454.86 crores (previous year Rs. 577.24 crores) including Corporate Dividend Tax of Rs. 57.16 crores (previous year Rs. 71.08 crores)

ii The Corporation has not issued or bought back any shares during the year and accordingly there is no change in the share capital.

* Secured in favour of the participating banks ranking pari passu inter-alia by hypothecation of raw materials, finished goods, stock- in- process, book debts, stores, components and spares and all movables both present and future.

Additional information in respect of note no. 12:

a) Other adjustments include capitalization of foreign exchange differences of Rs. 149.73 Crores (previous yearRs. Nil) and borrowing costs of Rs. 10.51 Crores (previous yearRs. 89.68 Crores).

b) Land:

i) Freehold land includes Rs. 32.08 Crores (previous yearRs. 32.08 Crores) with more than 99 years lease period.

ii) Freehold land includes Rs. 145.06 Crores (previous yearRs. 142.97 Crores) capitalised at various locations for which conveyance deeds are yet to be executed and/or mutation is pending.

iii) Includes the following which though in the possession of Corporation, the lease deeds are yet to be registered :

- Land acquired on lease for a period exceeding 99 years Rs. 0.91 Crores (previous year Rs. 0.91 Crores).

- Other leasehold land - Gross Block Rs. 0.51 Crores (previous year Rs. 0.51 Crores), Net Block Rs. 0.30 Crores (previous yearRs. 0.41 Crores).

iv) Freehold land includes Rs. 2.20 Crores (previous year Rs. 2.20 Crores) which is in the process of being surrendered to the Competent Authority.

c) Buildings include Ownership flats of Rs. 48.16 Crores (previous year Rs. 48.16 Crores) in proposed / existing co-operative societies and others.

d) Land, Plant & Machinery, Tanks & Pipelines, Railway Sidings and Buildings jointly owned in varying extent with other Oil Companies / Railways: Gross Block Rs. 187.83 Crores (previous year Rs. 187.13 Crores), Cumulative Depreciation Rs. 90.66 Crores (previous yearRs. 90.02 Crores), Net Block Rs. 97.17 Crores (previous year Rs. 97.11 Crores).

h) Gross Block includes Rs. 16.66 Crores (previous year Rs. 24.72 Crores) towards assets which are identified as held for disposal during the period in respect of which additional depreciation of Rs. 5.29 Crores (previous yearRs. 9.32 Crores) has been provided to recognise the expected loss on disposal.

Additional information in respect of note nos. 12 and 13:

a. Deduction from Gross Block includes Write back of excess capitalisation of Rs. 39.76 Crores (previous yearRs. 53.17 Crores)and Deletions during the period Rs. 131.07 Crores (previous yearRs. 62.85 Crores).

b. Depreciation for the period includes charged to Profit & Loss account Rs. 1,886.53 Crores (previous yearRs. 1657.05 Crores) and to Prior Period expenses Rs. 1.08 Crores (previous yearRs. 0.57 Crores).

c. Deductions from depreciation includes on excess capitalisation Rs. 1.41 Crores (previous yearRs. 1.29 Crores); on withdrawal of depreciation on deletion during the period Rs. 106.06 Crores (previous yearRs. 49.91 Crores); on reclassification of assets Rs. 0.24 Crores (previous yearRs. 0.36 Crores) and credited to Prior Period Rs. 0.38 Crores (previous yearRs. 14.33 Crores).

2. As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as follows:

a) Rs. 11,334.82 crores (previous year Rs. 5,746.54 crores) discount on crude oil purchased from ONGC has been adjusted against cost of raw materials consumed;

b) Rs. 1,622.38 crores (previous year Rs. 1,213.50 crores) discounts on SKO and LPG purchased from ONGC/GAIL have been adjusted against "Purchases of Stock in trade".

c) Rs. 19,671.39 crores (previous year Rs. 9,418.88 crores) subsidy from Government of India has been accounted as Revenue from operations.

3. Pursuant to the Ministry of Corporate Affairs Notification G.S.R. 914 (E) dated 29th December 2011, the Corporation has exercised the option under Para 46 A of AS-11 (notified under the Company's Accounting Standard Rules, 2006) and has changed its accounting policy for recognition of exchange differences arising on reporting of long term foreign currency monetary items. For the current financial year, such exchange differences are adjusted to the cost of depreciable assets acquired, which hitherto were charged to the Statement of Profit and Loss. Impact on account of this change for the current year (net of depreciation) is increase in profit before tax of Rs. 110.58 crores.

4. As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (KRL) with the Corporation approved by the Government of India, 33,728,738 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the financial year 2006-07. Accordingly the cost of the original investment of Rs. 659.10 crores is included in Note No.16-Non Current Investments. The income distributed by the trust during the year 2011-12 amounting to Rs. 47.22 crores (previous year Rs. 47.22 crores) have been included in 'Other income' in Note No.26.

One shareholder of erstwhile KRL has challenged the amalgamation before Delhi High Court, which is pending adjudication.

5. Provision for Income tax has been made in accordance with Section 115JB of the Income Tax Act, 1961. However, management is confident that it would be in a position to pay normal tax within the period specified under the Income Tax Act, 1961 and hence MAT credit has been recognised.

6. Impairment of Assets: It is assumed that a suitable mechanism would be in place, in line with earlier/ current year(s), to provide compensation towards under recoveries of margin, if any, on account of sale of sensitive petroleum products in subsequent years. Hence, there is no indication of impairment of assets of the company. Accordingly, impairment is not considered as at 31st March 2012.

7. Segment Reporting: The Corporation operates in a single segment - Refinery and Marketing activities, i.e. downstream petroleum sector. Considering the nature of business and operation, there is no reportable segment (business and/or geographical) in accordance with the requirements of Accounting Standard 17.

8. The Corporation has numerous transactions with other oil companies. The outstanding balances from them including certain other outstanding credit and debit balances are subject to confirmation/reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement.

9. Disclosure as per requirements of Accounting Standard 15 - "Employee Benefits" :

The Corporation's contribution to the Provident Fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employee's salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Corporation and charged to Statement of Profit and Loss.

Gratuity: The Company has a defined benefit gratuity plan managed by a trust. The contribution based upon actuarial valuation is paid /payable to a trust which is invested as per investment pattern prescribed by the Government in plan assets. Gratuity is paid to the Staff member who has put in a minimum qualifying period of 5 years of continuous service on superannuation, resignation, termination or to his nominee on death.

Leave Encashment: The Employees are entitled to accumulate Earned Leave and Sick Leave, which can be availed during the service period. Employees are also allowed to encash the accumulated earned leave during the service period. Further, the accumulated earned leave and sick leave can be encashed by the employees on superannuation, resignation, and termination or by nominee on death.

Other Defined Benefits: These are (a) Post Retirement Medical Scheme benefit (managed by trust) to employees, spouse, dependant children and dependant parents; (b) Pension/ex-gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life; (c) Death in service / Permanent disablement given to employee, the spouse of the employee, provided the deceased's family/disabled employee deposits retirement dues such as PF, Gratuity, Leave encashment payable to them with the Corporation; and (d) Resettlement allowance paid to employees to permanently settle down at a place other than the location of last posting at the time of retirement.

10. Related Party Disclosures as per Accounting Standard 18 Names of the Related parties (Joint Venture Companies):

Indraprastha Gas Limited

Petronet India Limited

Petronet CCK Limited

Petronet CI Limited

Petronet LNG Limited

Bharat Oman Refineries Limited

Petroleum Infrastructure Limited

Maharashtra Natural Gas Limited

Central UP Gas Limited

Sabarmati Gas Limited

Bharat Stars Services Private Limited

Bharat Renewable Energy Limited

Matrix Bharat Pte. Ltd.

Delhi Aviation Fuel Facility Private Limited

IBV (Brazil) Petroleo Pvt Ltda.

Petroleum India International (Association of Persons)

11. Dues from Directors is Rs. 0.43 Crores (previous year Rs. 0.14 Crores) and Dues from Officers is Rs. 3.49 Crores (previous year Rs. 3.67 Crores).

12. In compliance with AS - 27 'Financial Reporting of Interests in Joint Ventures', the required information is as under:

b) In respect of jointly controlled entities, the Corporation's share of assets, liabilities, income, expenditure, contingent liabilities and capital commitments compiled on the basis of unaudited / audited financial statements received from these joint ventures are as follows:

13. Capital Commitments and Contingent Liabilities :

Rs. Crores

31/03/2012 31/03/2011

(a) Capital Commitments :

Estimated amount of contracts remaining to be executed on capital account 816.15 804.98 and not provided for

(b) Contingent Liabilities :

In respect of Income Tax matters 122.63 95.26

Other Matters :

i) Surety bonds executed on behalf of other oil companies for excise/ 183.45 183.45 customs duties for which BPCL has signed as surety

ii) Claims against the Corporation not acknowledged as debts :

Excise and customs matters 645.34 1,242.94

Sales tax matters 2,802.22 2,880.03

Land Acquisition cases for higher compensation 91.56 95.16

Others 296.21 227.20

These include Rs. 1234.00 crores (previous year Rs. 1014.13 crores) against which the Corporation has a recourse for recovery and Rs. 28.31 crores (previous year Rs. 43.73 crores) on capital account.

iii) Claims on account of wages, bonus/ex-gratia payments in respect of 13.44 6.15 pending court cases.

iv) Guarantees given on behalf of Subsidiaries/JVs 4,618.30 4,408.77

14. (a) The Corporation has on the Balance Sheet date, outstanding forward contracts amounting to USD 1,857.51 million i.e. an equivalent of Rs. 9,502.38 Crores (previous year USD 1793 Million i.e. an equivalent of Rs. 8,005.75 Crores) to hedge the foreign currency exposure towards loans; this includes Nil (previous year USD 55 million i. e. an equivalent of Rs. 245.58 Crores ) in respect of long term loans. The Corporation does not generally hedge the currency risks on account of foreign exposure for the payment of crude oil. Following are the unhedged foreign currency on account of exposures :

15. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Corporation. It has significant impact on presentation and disclosures made in the financial statements. The Corporation has also reclassified / regrouped previous year figures in accordance with the requirements applicable in the current year.


Mar 31, 2011

1. As advised by the Ministry of Petroleum & Natural Gas, the Corporation has accounted compensation towards sharing of under-recoveries on sale of sensitive petroleum products as follows:

a) Rs 5,746.54 crores (previous year Rs 2,927.27 crores) discount on crude oil purchased from ONGC has been adjusted against raw material cost;

b) Rs 1,213.50 crores (previous year Rs 702.57 crores) discounts on SKO and LPG purchased from ONGC/GAIL has been adjusted against "Purchase of products and crude oil for resale".

c) Rs 9,418.88 crores (previous year Rs 5,265.03 crores) subsidy from Government of India has been accounted as Income.

2. Debentures

a) The Corporation had allotted redeemable non-convertible 7.73% Debentures of face value of Rs 1,000 crores on 12th October 2009. These are secured by first legal mortgage in English form by way of a Registered Debenture Trust Deed over the fixed assets of the Company, viz., a Flat at Mumbai and the Plant and Machinery in respect of Refinery Modernisation Project Crude Distillation Unit / Vacuum Distillation Unit, Catalytic Cracking Unit, Fluid Catalytic Cracking Unit, Diesel Hydro Desulphurisation Unit and Naphtha Hydro Desulphurisation Unit of the Mumbai Refinery. In order to maintain the security cover of 1.25 times, all future immovable properties including Land, Plant & Machinery and Fixtures & Fittings shall be a part of the Premises and Plant & Machinery which are mortgaged. These Debentures are redeemable at par on 9th October 2012.

b) The Corporation has allotted redeemable non-convertible 6.23% Debentures of face value of Rs 1,000 crores on 30th April 2010. These are secured by first legal mortgage in English form by way of a Registered Debenture Trust Deed over the fixed assets of the Company, viz., a Flat at Mumbai and Plant and Machinery of the company in respect of its Process Equipments situated at Mahul Refinery. In order to maintain the security cover of 1.25 times, all future immovable properties including Land, Plant & Machinery and Fixtures & Fittings shall be a part of the Premises and Plant & Machinery which are mortgaged. These Debentures are redeemable at par on 28th October 2011.

3. As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited with the Corporation approved by the Government of India, 33,728,738 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile Kochi Refineries Limited) to a trust for the benefit of the Corporation in the financial year 2006-07. Accordingly the cost of the original investment of Rs 659.10 crores is reflected as 'Others' in Schedule 'J ' - Other Current Assets. The income distributed by the trust during the year 2010-11 amounting to Rs 47.22 crores (previous year Rs 23.61 crores) has been included in 'Other income' in Schedule 'O' – Miscellaneous Income.

One shareholder of erstwhile KRL has challenged the amalgamation before Delhi High Court, which is pending adjudication.

4. Impairment of Assets

Determination as to whether and how much an asset is impaired involve Management estimates of highly uncertain matters such as international prices of crude oil and products, duty structure and Government policies. It is assumed that suitable mechanism would be in place, in line with earlier/ current year(s), to provide compensation towards under-recoveries of margin, if any, on account of sale of sensitive petroleum products in subsequent years. Hence, future cash flows have been worked out based on the desired margins for deciding on impairment of related Cash Generating Units. No impairment is therefore considered as at 31st March 2011.

5. The Cubject to confirmation. Adjustments, if any, arising therefrom are not likely to be material on settlement.

6. The Corporation changed its existing "Employees' Contributory Superannuation Scheme", from a Defined Benefit Scheme (DBS) into a Defined Contribution Scheme (DCS) applicable to all employees w.e.f. 1.1.2007. The net shortfall of Rs 373.00 crores based on actuarial valuation in the DBS due to this changeover has been provided as a one-time contribution. Further, the Corporation has also provided Rs 773.00 crores towards its liability to the DCS and fororporation has numerous transactions with other oil companies, which are reconciled on an ongoing basis and s pay-revision of non-management employees on an estimated basis.

7. Provision for taxation is computed, considering the liability provided during the year for the Superannuation Scheme as allowable expenditure. The Corporation is in the process of modifying the Scheme and there is reasonable certainty that approval would be obtained from tax authorities. Provision for taxation also includes Rs 1.50 crores (previous year Rs 1.50 crores) towards wealth tax.

9. Disclosure as per requirements of Accounting Standard 15 - "Employee Benefits" :

Gratuity: The Company has a defined benefit gratuity plan managed by a trust. The contribution based upon actuarial valuation is paid /payable to a trust which is invested as per investment pattern prescribed by the Government in plan assets. Gratuity is paid to the Staff member who has put in a minimum qualifying period of 5 years of continuous service on superannuation, resignation, termination or to his nominee on death.

Leave Encashment: The Employees are entitled to accumulate Earned Leave and Sick Leave, which can be availed during the service period. Employees are also allowed to encash the accumulated earned leave during the service period. Further, the accumulated earned leave and sick leave can be encashed by the employees on superannuation, resignation, and termination or by nominee on death.

Other Defined Benefits: These are (a) Post Retirement Medical Scheme benefit to employees, spouse, dependant children and dependent parents; (b) Pension/ex-gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life; (c) Death in service / Permanent disablement given to employee, the spouse of the employee, provided the deceased's family/disabled employee deposits retirement dues such as P F, Gratuity, Leave encashment payable to them with the Corporation; and (d) Resettlement allowance paid to employees to permanently settle down at a place other than the location of last posting at the time of retirement.

10. Related Party Disclosures as per Accounting Standard 18

Names of the Related parties :

Indraprastha Gas Limited

Petronet India Limited

Petronet CCK Limited

Petronet CI Limited

Petronet LNG Limited

Bharat Oman Refineries Limited

Petroleum Infrastructure Limited

Petroleum India International

Maharashtra Natural Gas Limited

Central UP Gas Limited

Sabarmati Gas Limited

Bharat Stars Services Private Limited

Bharat Renewable Energy Limited

Matrix Bharat Marine Services Pte. Ltd.

Delhi Aviation Fuel Facility Private Limited

IBV Brasil Petroleo Ltda.

Key Management Personnel : M/s. Ashok Sinha (Chairman & Managing Director)

(Whole time Directors) up to 18th August, 2010.

S. Radhakrishnan (Director Marketing) up to 28th February 2011. Held Additional charge of Chairman & Managing Director from 19th August 2010 to 8th December 2010.

R.K. Singh (Chairman & Managing Director) w.e.f. 9th December,2010 and prior to that he was Director (Refineries).

K.K. Gupta (Director Marketing) w.e.f. 31st March,2011

S. Mohan (Director Human Resources)

Sudhir K. Joshi (Director Finance)

Details of remuneration to Directors are given in note 20 of Notes to Accounts.

11. Deferred Tax Liability

As per the requirement of the Accounting Standard 22 - "Accounting for Taxes on Income" the net deferred tax liability debited during the year is Rs 148.24 crores (previous year net deferred tax asset credited Rs 303.25 crores).

12. Segment Reporting: The Corporation operates in a single segment - Refinery and Marketing activities, i.e, Downstream petroleum sector. Considering the nature of business and operation, there is no reportable segment (business and/or geographical) in accordance with the requirements of Accounting Standard 17.

13. Capital Commitments and Contingent Liabilities :

31/03/2010

Rs Crores Rs Crores

13.1 Capital Commitments : Estimated amount of contracts remaining to be executed on capital account and not provided for 804.98 1,300.53

13.2 Contingent Liabilities :

(a) In respect of Income Tax matters 95.26 59.88

(b) Other Matters : i) Surety bonds executed on behalf of other oil companies for excise/ customs duties for which BPCL has signed as surety 183.45 195.30

ii) Claims against the Corporation not acknowledged as debts :

(a) Excise and customs matters 1,242.94 1,190.86

(b) Sales tax matters 2,880.03 2,668.30

(c) Others * 322.36 263.12

These include Rs 1014.13 crores (previous year Rs 751.55 crores) against which the Corporation has a recourse for recovery and Rs 43.73 crores (previous year Rs 29.42 crores) on capital account. * In respect of lands acquired, land owners have claimed higher compensation before various Authorities / Courts, which are yet to be settled. The estimated contingent liability of Rs 95.16 crores (previous year Rs 54.63 crores) in such cases is included above.

iii) Claims on account of wages, bonus/ex-gratia payments in respect of pending court cases. 6.15 4.55

iv) Guarantees given on behalf of Subsidiaries/JV's 4,408.77 3,700.43

14. 18.1 Foreign Exchange losses amounting to Rs 205.31 crores (previous year Rs 37.42 crores) are regarded as adjustment to Interest cost and debited to Interest expenditure. 18.2 The deferred premium amounting to Rs 130.77 crores (previous year Rs 90.29 crores) in respect of for ward exchange contract will be recognised in the Profit & Loss Account of one or more subsequent accounting periods.

15. Figures of the previous year have been regrouped wherever necessary, to conform to current year presentation.


Mar 31, 2010

1) In respect of sharing of under-recoveries on sensitive petroleum products viz. MS, HSD, LPG (Domestic) and SKO (PDS), as advised by the Ministry of Petroleum & Natural Gas, a part of the under-recovery suffered by the Corporation during the year was compensated by ONGC and GAIL by offering discount on price of Crude Oil, SKO and LPG purchased from them. Accordingly, the Corporation has accounted the discount as follows:

a) Rs.2,927.27 crores (previous year Rs. 6,709.94 crores) discount on crude oil purchased from ONGC has been adjusted against raw material cost; and

b) Rs. 702.57 crores (previous year Rs. 846.50 crores) discounts on SKO and LPG purchased from ONGC/GAIL has been adjusted against "Purchase of products and crude oil for resale".

2) In lieu of the under-recoveries on sale of petroleum products during 2009-10, based on the approval of Government of India, the Corporation has accounted for the subsidy amounting to Rs.5,265.03 crores as income (previous year Rs.16,216.38 crores of Oil Marketing Companies GOI Special Bonds were accounted as Income). Out of the above, an amount of Rs.2,894.26 crores (previous year Oil Marketing Companies GOI Special Bonds amounting to Rs.2,065.28 crores) receivable as on 31st March 2010 from Government of India is shown as Other Current Assets in Schedule J.

3) Debentures:

a) The Corporation had allotted redeemable non-convertible 10.35% Debentures of face value of Rs.1,000 crores on 12th December 2008. These are secured by English mortgage, on first pari passu charge basis, by way of a Registered Debenture Trust Deed over the fixed assets of the Company, viz., a Flat at Mumbai and the Plant and Machinery in respect of Hydrocracker Unit and Aromatic Recovery Unit of the Mumbai Refinery. In order to maintain the security cover of 1.25 times, all future immovable properties including Land, Plant & Machinery and Fixtures & Fittings shall be a part of the Premises and Plant & Machinery which are mortgaged. These Debentures are redeemable at par on 11th June 2010.

b) The Corporation has allotted redeemable non-convertible 7.73% Debentures of face value of Rs.1,000 crores on 12th October 2009. These are secured by first legal mortgage in English form by way of a Registered Debenture Trust Deed over the fixed assets of the Company, viz., a Flat at Mumbai and the Plant & Machinery in respect of Refinery Modernisation Project Crude Distillation Unit / Vacuum Distillation Unit, Catalytic Cracking Unit, Fluid Catalytic Cracking Unit, Diesel Hydro Desulphurisation Unit and Naptha Hydro Desulphurisation Unit of the Mumbai Refinery. In order to maintain the security cover of 1.25 times, all future immovable properties including Land, Plant & Machinery and Fixtures & Fittings shall be a part of the Premises and Plant & Machinery which are mortgaged. These Debentures are redeemable at par on 9th October 2012.

4) As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited with the Corporation approved by the Government of India, 33,728,738 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile Kochi Refineries Limited) to a trust for the benefit of the Corporation in the financial year 2006-07. Accordingly the cost of the original investment of Rs. 659.10 crores is reflected as ‘Others’ in Schedule ‘J’ - Other Current Assets. The income distributed by the trust during the year 2009-10 amounting to Rs. 23.61 crores (previous year Rs. 13.49 crores) has been included in ‘Other income’ in Schedule ‘O’ - Miscellaneous Income.

One shareholder of erstwhile KRL has challenged the amalgamation before Delhi High Court, which is pending adjudication.

5) Provision for taxation in the Profit & Loss Account includes Rs.1.50 crores (previous year Rs. 1.40 crores) towards wealth tax.

6) The Corporation has numerous transactions with other oil companies, which are reconciled on an ongoing basis and subject to confirmation. Adjustments, if any, arising therefrom are not likely to be material on settlement.

7) The Corporation has made a provision of Rs.463 crores (previous year Rs.114 crores for management staff) towards balance liability on revision in emoluments of management staff and pending pay-revision of non-management staff on an estimated basis. Further, this has been considered for making provision at the year end for employee benefits based on actuarial valuations.

8) The Corporation has reclassified the entire portfolio of long term investments in 6.35% Oil Marketing Companies GOI Special Bonds 2024 - Rs.3,099.96 crores and 6.90% Oil Marketing Companies GOI Special Bonds 2026 - Rs.4,986.71 crores to current investments during the year, considering the future funds requirement. Accordingly an amount of Rs. 1086.50 crores has been provided for the diminution in value of these investments based on mark to market as on 31.3.2010.

9) Impairment of Assets

Determination as to whether and how much an asset is impaired involve Management estimates of highly uncertain matters such as international prices of crude oil and products, duty structure and Government policies. It is assumed that suitable mechanism would be in place, in line with earlier/ current year(s), to provide compensation towards under-recoveries of margin, if any, on account of sale of sensitive petroleum products in subsequent years. Hence, future cash flows have been worked out based on the desired margins for deciding on impairment of related Cash Generating Units. No impairment is therefore considered as at 31st March 2010.

11) Disclosure as per requirements of Accounting Standard 15 - "Employee Benefits" :

Gratuity: The Company has a defined benefit gratuity plan managed by a trust. The contribution based upon actuarial valuation is paid to a trust which is invested as per investment pattern prescribed by the Government in plan assets. Gratuity is paid to the Staff member who has put in a minimum qualifying period of 5 years of continuous service on superannuation, resignation, termination or to his nominee on death.

Leave Encashment: The Employees are entitled to accumulate Earned Leave and Sick Leave, which can be availed during the service period. Employees are also allowed to encash the accumulated earned leave during the service period. Further, the accumulated earned leave and sick leave can be encashed by the employees on superannuation, resignation, and termination or by nominee on death.

Other Defined Benefits: These are (a) Post Retirement Medical Scheme benefit to employees, spouse, dependent children and dependent parents. (b) Medical benefits carry forward entitlements (c) Pension/ex-gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life; (d) Death in service / Permanent disablement given to employee, the spouse of the employee, provided the deceased’s family/disabled employee deposits retirement dues such as PF, Gratuity, Leave encashment payable to them with the Corporation; and (e) Resettlement allowance paid to employees to permanently settle down at a place other than the location of last posting at the time of retirement.

12) Related Party Disclosures as per Accounting Standard 18

Names of the Related parties

Indraprastha Gas Limited

Petronet India Limited

Petronet CCK Limited

Petronet CI Limited

Petronet LNG Limited

Bharat Oman Refineries Limited

Petroleum Infrastructure Limited

Petroleum India International

Maharashtra Natural Gas Limited

Central UP Gas Limited

Sabarmati Gas Limited

Bharat Stars Services Private Limited

Premier Oil Cachar B.V.

Bharat Renewable Energy Limited

Matrix Bharat Marine Services Pte. Ltd.

Delhi Aviation Fuel Facility Private Limited

VB (Brazil) Petroleo Private Ltda.

Key Management Personnel (Whole time Directors)

M/s. Ashok Sinha (Chairman & Managing Director), S. Mohan (Director Human Resources) S. Radhakrishnan (Director Marketing), S. K. Joshi (Director Finance) R. K. Singh (Director Refineries)

13) Segment Reporting: The Corporation operates in a single segment - Refinery and Marketing activities, i.e, Downstream petroleum sector. Considering the nature of business and operation, there is no reportable segment (business and/or geographical) in accordance with the requirements of Accounting Standard 17.

14. 14.1 Foreign Exchange losses amounting to Rs.37.42 crores (previous year Rs. 194.58 crores) are regarded as adjustment to Interest cost and debited to Interest expenditure. 20.2 The deferred premium amounting to Rs.90.29 crores (previous year Rs. 123.21 crores) in respect of forward exchange contract will be recognised in the Profit and Loss Account of one or more subsequent accounting periods.

15. 15.1 The Corporation has on the Balance Sheet date, outstanding forward contracts amounting to USD 816.95 million (previous year USD 424.33 million) to hedge the foreign currency exposure towards loans; this includes USD 55 million (previous year USD 107.50 million) in respect of long term loans. The Corporation does not generally hedge the risks on account of foreign currency exposure for the payment of crude oil. Following are the unhedged foreign currency exposures as on 31.03.2010:

16. Figures of the previous year have been regrouped wherever necessary, to conform to current year presentation.

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