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).
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
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
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.
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
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
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
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 :
(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.