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.