Dear Shareowners,
 
 It gives me immense pleasure to communicate to you for the first time
 since taking over as Chairman & Managing Director.
 
 The fnancial year that has just gone by saw several important
 milestones being achieved.  Amongst the key developments during the
 year was the announcement of fve oil and gas discoveries in Mozambique,
 Brazil and Indonesia from exploration blocks where BPCL''s wholly owned
 subsidiary company, Bharat Petro Resources Limited has participating
 interest. This augurs well for the future in terms of oil and gas
 equity for the company once production starts in these blocks.
 
 The year also saw the commissioning of the 6 Million Metric Tonnes per
 annum (MMTPA) grass roots refnery in Bina in Madhya Pradesh which was
 set up by Bharat Oman Refneries Limited (BORL). BORL is a company
 promoted by BPCL and in which Oman Oil Company and the Madhya Pradesh
 Government are partners.  Hon''ble Prime Minister, Dr. Manmohan Singh
 dedicated the refnery to the nation on 20th May, 2011. Once all the
 units stabilize, the refnery would go a long way in meeting the product
 requirements of BPCL in central and northern parts of the country. The
 Kochi refnery also commissioned the Capacity Expansion and
 Modernisation Project which saw the refnery''s processing capacity
 increase from 7.5 MMTPA to 9.5 MMTPA.
 
 The external environment in which we are operating continues to remain
 extremely volatile and challenging. Crude oil prices have remained at
 high levels. BPCL has to deal with the issue of high under-recoveries
 on the sale of sensitive petroleum products. Under the circumstances,
 effective management of the cash fows remains a challenge. The interest
 rates are on the uptrend, consequent to the Reserve Bank of India
 raising the key monetary rates as it tries to rein in the persistently
 high levels of infation in the economy.  Notwithstanding the diffcult
 conditions, we remain committed to augment our downstream capabilities
 in order to be able to meet the growing energy needs of the country.
 
 As a company, BPCL and its employees have always sought to put their
 best foot forward and this approach has helped achieve outstanding
 results in the past.  Carrying this tradition forward, the company has
 drawn up ambitious plans for the next 5 years. Under Project
 ''DreamPlan'', BPCL has lined up major capital expenditure plans, which
 are aimed at ensuring that the company is in a position to capitalise
 on the immense opportunities available and build on its competitive
 edge in the market place.
 
 In addition to enhancing the refning capacity to meet the growing
 demand for petroleum products, BPCL is exploring the possibility of
 achieving value addition by venturing into the petrochemicals space.
 BPCL is looking at using the raw material produced at the Kochi refnery
 to manufacture value added products having excellent demand, but
 limited availability within the country at present.
 
 BPCL has been an early mover in the gas business.  However a lack of
 distribution infrastructure has come in the way of BPCL enhancing its
 presence in the gas market. A number of options are being explored,
 including participation in consortiums for bidding for pipelines and
 setting up LNG terminals.
 
 BPCL remains committed towards strengthening its core business of
 refning and marketing of petroleum products.  Towards this end, major
 plans have been drawn up for enhancing the port and distribution
 infrastructure and setting up of new retails outlets, particularly in
 the rural markets.
 
 A number of exploration and production blocks, where BPCL''s subsidiary
 company has participating interest, will be entering the development
 phase. There will be a need to contribute our proportionate share of
 the expenditure during the development phase. Considering the nature of
 the exploration and production business, the amounts involved will be
 quite substantial.
 
 While all the initiatives outlined above will involve large capital
 outlays, their successful completion can take BPCL to the next level
 and enhance the value to the shareholders. If this has to be achieved,
 execution becomes the key and therefore, the focus has been on putting
 in place strong monitoring mechanisms that facilitate timely completion
 of projects at the right cost.
 
 BPCL has recently commenced a new project which is aimed at connecting
 effectively with our customer and getting to know them and their needs.
 The objective behind this is to develop a deeper relationship with our
 customers and ensure that they avail of the entire range of BPCL''s
 product and services offerings across all business units. Success in
 this initiative can help in building a stronger bond with our customers
 and also contribute towards designing products and services that meet
 their needs in the best possible manner. Ultimately, BPCL aims to
 reinforce its image as a company that is caring and focused on meeting
 the different requirements of customers.
 
 One of the key challenges in the coming days is in the domain of Human
 Resources. As the company grows in size and complexity, there would be
 a need to have a trained pool of skilled and experienced manpower. BPCL
 continues to provide a work climate which encourages excellence in all
 areas of operations and thereby, goes a long way in retaining talent.
 BPCL has been blessed with an excellent team at all levels and it is
 their untiring efforts that have taken the company to this level.
 
 The journey ahead is indeed very tough and challenging.  We look
 forward to receiving your unstinted support and encouragement in all
 our endeavours. My colleagues on the Board and I remain confdent of
 BPCL''s ability to achieve its ambitious goals and targets and thereby,
 deliver value to each one of you.
 
                                                   Warm regards,
 
                                                    R. K. SINGH
 
                                   Chairman & Managing Director