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Directors Report of Bharat Petroleum Corporation Ltd.

Mar 31, 2016

The Board of Directors is delighted to present its Report on the performance of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31st March, 2016.

PERFORMANCE OVERVIEW

Group Performance

During 2015-16, the combined Refinery throughput of BPCL''s Refineries at Mumbai and Kochi, along with its Subsidiary Company Numaligarh Refinery Limited (NRL) and considering 50% throughput of Joint Venture Company, Bharat Oman Refineries Limited, was 29.82 Million Metric Tonnes (MMT) as compared to 29.27 MMT during 2014-15. The BPCL Group ended the year with market sales of 36.83 MMT, as compared to 34.95 MMT in the previous year. During the year, the BPCL Group exported 1.90 MMT of petroleum products as against 2.22 MMT in 2014-15.

The Financial Year saw the Group achieve a Gross Revenue from Operations of Rs. 2,19,253.07 crores, as compared toRs. 2,58,731.09 crores recorded in 2014-15. The Profit after Tax stood atRs. 8,463.98 crores in 2015-16, as against Rs. 5,082.01 crores in the previous year. The Group recorded earnings per share of Rs. 110.38 in the current year against Rs. 66.47 in 2014-15, after setting off the minority interest.

CONSOLIDATED GROUP RESULTS

2015-16 2014-15

Physical Performance

Crude Throughput (MMT) 29.82 29.27

Market Sales (MMT) 36.83 34.95

Financial Performance Rs. Crores

Gross Revenue from Operations 2,19,253.07 2,58,731.09

Less: Excise Duty (30,601.71) (16,132.59)

Net Revenue from Operations 1,88,651.36 2,42,598.50

Profit before Depreciation, Finance Costs and Tax 16,154.61 11,897.62

Finance Costs 1,132.07 1,180.47

Depreciation & amortization expense 2,428.63 3,026.68

Profit before tax 12,593.91 7,690.47

Provision for taxation - Current (Net of MAT Credit Entitlement) 3,495.20 2,522.44

Profit after Current Tax 9,098.71 5,168.03

Provision for taxation - Deferred (Asset )/Liability 626.13 95.55

Short/(Excess) provision for Taxation in earlier years provided for 8.60 (9.53)

Net Profit 8,463.98 5,082.01

Share in profit of associates 2.49 -

Minority Interest 484.96 275.44

Net Income of the group attributable to BPCL 7,981.51 4,806.57

Group Earnings per share attributable to BPCL (Rs.) 110.38 66.47

COMPANY RESULTS

2015-16 2014-15

Physical Performance

Crude Throughput (MMT) 24.12 23.36

Market Sales (MMT) 36.53 34.45

Rs. Crores

Financial Performance

Gross Revenue from Operations 2,18,011.04 2,53,254.86

Less: Excise Duty (28,707.71) (15,167.96)

Net Revenue from Operations 1,89,303.33 2,38,086.90

Profit before Depreciation, Finance Costs and Tax 13,068.42 10,514.63

Finance Costs 562.94 583.10

Depreciation & amortization expense 1,854.30 2,516.02

Profit before tax 10,651.18 7,415.51

Provision for Taxation - Current (Net of MAT Credit Entitlement) 2,684.00 2,010.00

Provision for Taxation - Deferred 520.64 347.36

Short/(Excess) provision for taxation in earlier years'' provided for 14.66 (26.36)

Net Profit for the year 7,431.88 5,084.51

Balance brought forward 500.00 500.00

Amount available for disposal 7,931.88 5,584.51

The Directors propose to appropriate this amount as under:

Towards Dividend:

Final (proposed) Dividend 1,084.63 1,626.94

Towards Corporate Dividend Tax on final (proposed) dividend 188.48 294.27

Interim Dividend 1,156.93 -

Towards Corporate Dividend Tax on interim dividend 202.51 -

For transfer to Debenture Redemption Reserve 243.75 194.35

For transfer to General Reserve 4,555.58 2,968.95

Balance carried to Balance Sheet 500.00 500.00

Summarized Cash Flow Statement:

Cash Flows:

Inflow/(Outflow) from operations 10,233.90 18,183.34

Inflow/(Outflow) from investing activities (7,855.68) (7,909.12)

Inflow/(Outflow) from financing activities (2,012.35) (9,121.19)

Net increase/(decrease) in cash & cash equivalents 365.87 1,153.03

Company Performance

BPCL''s Refineries at Mumbai and Kochi recorded a crude throughput of 24.12 MMT during 2015-16, as compared to 23.36 MMT achieved in 2014-15. The Company''s market sales grew by 6% to 36.53 MMT in 2015-16 from 34.45 MMT in 2014-15.

During 2015-16, the Gross Revenue from Operations was Rs. 2,18,011.04 crores, lower by 13.92% over the previous year''s revenues of Rs. 2,53,254.86 crores. The Profit before Tax for the year was Rs. 10,651.18 crores as compared to Rs. 7,415.51 crores in 2014-15. The year 2015-16 has been an unprecedented year for BPCL with a Profit after Tax of Rs. 7,431.88 crores, as against the previous year best of Rs. 5,084.51 crores. This is after providing for tax (including deferred tax) of Rs. 3,219.30 crores, as against Rs. 2,331.00 crores during the last year.

The earnings per share crossed the Rs. 100 mark at Rs. 102.78 in 2015-16, as against Rs. 70.32 in 2014-15. Internal cash generation increased by almost 20% to Rs. 7,167.13 crores during 2015-16, as against Rs. 5,989.18 crores in 2014-15. During 2015-16, the Company has contributed to the exchequer by way of taxes and duties to the extent of Rs. 67,719.17, crores as compared to Rs. 51,121.77 crores in the previous Financial Year.

As on 31st March, 2016, BPCL''s Shareholders'' funds stand at Rs. 27,158.69 crores, as against the previous year''s figure of Rs. 22,467.48 crores.

Dividend

The Board of Directors recommended a final dividend of 150% (Rs. 15.00 per share) for the year on the paid-up share capital of Rs. 723.08 crores. This will absorb a sum of Rs. 1,273.11 crores inclusive of Rs. 188.48 crores for

Corporate Dividend Tax on distributed profits out of the profit after tax. In addition, two interim dividends of 125% (Rs. 12.50 per share) and 35% (Rs. 3.50 per share) totaling to Rs. 1,359.44 crores inclusive of Rs. 202.51 crores for Corporate Dividend Tax on distributed profits were distributed during the year.

The Company, being a Central Public Sector Enterprise (CPSE), follows the Government guidelines for payment of dividend. Accordingly, the Company has been implementing minimum dividend pay-out of 30% of post-tax profits. As per revised Government guidelines effective from 27th May, 2016, the CPSEs are required to pay a minimum annual dividend of 30% of profit after tax or 5% of the net-worth, whichever is higher, subject to the maximum dividend permitted under the extant legal provisions.

Transfer to Reserves

It is proposed to transfer Rs. 4,555.58 crores to the General Reserve out of the amount available for appropriation and a sum of Rs. 500.00 crores is to be retained as Surplus in the Statement of Profit and Loss.

Borrowings

The year saw a decrease in borrowings from banks from Rs. 6,925.26 crores as at 31st March, 2015 to Rs. 6,243.92 crores at the close of the current Financial Year. The Company had availed a loan from Oil Industr y Development Board of which the balance outstanding as on 31st March 2016 is Rs. 1,725.24 crores against Rs. 1,049.50 crores at the end of the previous year. Debentures worth Rs. 700 crores issued in 2012-13 were redeemed during the year 2015-16. 4.625% US Dollar International Bonds issued during 2012-13 of USD 500 Million (equivalent to Rs. 3,316.65 crores), 3% Swiss Franc International Bonds issued during 2013-14 of CHF 200 Million (equivalent to Rs. 1,373.30 crores), and 4% US Dollar International bonds issued during 2015-16 of USD 500 Million (equivalent to Rs. 3,316.65 crores) continued to remain outstanding as on 31st March, 2016.

Deposits from Public

The Company has not accepted any deposit from the public during the year. The amount of deposits, matured but unclaimed, at the end of the year was Rs. 0.02 crores, which pertains to 7 depositors. The unclaimed amount is being transferred to the Investors Education and Protection Fund after the respective due dates.

Capital Expenditure

The total Capital Expenditure during the year 2015-16 amounted to Rs. 9,692.72 crores, as compared to Rs. 8,494.40 crores during the year 2014-15.

C& AG Audit

The Comptroller and Auditor General of India''s (C&AG) comment upon or supplement to the Statutory Auditors'' Report on the Accounts for the year ended 31st March, 2016 is annexed as Annexure E.

REFINERIES

MUMBAI REFINERY

Mumbai Refinery registered a throughput of 13.41 MMT of feedstock (crude oil and other feedstocks) during the year 2015-16 in comparison to 12.96 MMT achieved in 2014-15. This is the highest throughput ever achieved in Mumbai Refinery. Mumbai Refinery has also achieved 84.3% of distillate yield as against 81.8% in the previous year, which again is the highest ever achieved. The Refinery posted a capacity utilization of 111.7% during the year against 108.0% in the last year.

The Refinery recorded its highest ever production during the year 2015-16 in Motor Spirit (MS), High Speed Diesel (HSD), Propylene and Lube Oil Base Stock (LOBS). Mumbai Refinery has again demonstrated its ability to meet the increasing demand for MS and HSD conforming to Euro IV quality norms.

The Gross Refining Margin (GRM) of USD 6.37 per barrel for the year is higher than the USD 3.97 per barrel realized in 2014-15. The overall gross margin for the Refinery in 2015-16 totaled to Rs. 4,198 crores, as compared to Rs. 2,363 crores in 2014-15. The higher GRM in Mumbai Refinery for the year 2015-16 is primarily a result of higher distillate yield, better cracks, higher production of transportation fuels and reduction in octroi cost.

KOCHI REFINERY

Kochi Refinery reported a crude throughput of 10.71 MMT in 2015-16 against 10.40 MMT in 2014-15. During the year, the Refinery''s capacity utilization was at 112.7%, as compared to the 109.5% registered in the previous year. Kochi Refinery recorded its best ever production of LPG, BS-III MS, BS-IV MS, ATF and BS-IV HSD in 2015-16. Further, Kochi Refinery commenced increased supply of BS IV grade auto fuels effective 15th February, 2016, thereby meeting the demand of Southern India as per the directive of the Government of India. Kochi Refinery recorded a GRM of USD 6.87 per barrel totaling to Rs. 3,610 crores for the year 2015-16. This is against the previous year achievement of USD 3.17 per barrel and Rs. 1,514 crores. The increase in GRM during 2015-16 over the previous year is mainly due to better product cracks, higher distillate yield, efficient fuel and loss and better crude mix.

The GRM of BPCL''s Kochi Refinery during Financial Year 2015-16 is the highest ever in total rupee crores terms and one of the best in PSU refineries in USD per barrel terms.

The details of the performance of the Refineries, their activities and future plans are discussed in the Management Discussion and Analysis Report (MD&A).

MARKETING

BPCL''s market sales volumes increased by 6.00% to 36.53 MMT in the year 2015-16 from 34.45 MMT in the last year. The market share of BPCL amongst the Public Sector Oil Companies stood at 22.94% as at 31st March, 2016 as compared to 23.29% as at the end of the previous year.

A detailed discussion of the performance of the Marketing function is given in the MD&A.

PROJECTS

Integrated Refinery Expansion Project (IREP) at Kochi

The Company''s Integrated Refinery Expansion Project (IREP) at Kochi Refinery will increase the Refinery capacity to 15.5 MMTPA from its present level of 9.5 MMTPA. The modernization of the Refinery facilities envisages production of auto fuels conforming to BS-IV/VI specifications and upgradation of the residue streams to distillates and Petcoke. The approved cost of the project is Rs. 16,504 crores. The Crude Distillation Unit (CDU)/Vacuum Distillation Unit (VDU) and first Gas Turbine Generator (GTG) are mechanically completed and pre-commissioning activities are in progress. Raw water quarry & Raw water treatment plant have been commissioned. Other major units such as Diesel Hydro Treater (DHDT), two GTG, two utility Boilers, Vacuum Gas Oil Hydro Treater, Sulphur Recovery Unit, Delayed Coker Unit and Fluid Catalytic Cracking Unit are planned for completion sequentially as per commissioning requirements. The project has achieved an overall physical progress of 96.42% with cumulative expenditure of Rs. 11,626 crores as on 30th June, 2016. The project is expected to be operational and stabilized during the third quarter of the current Financial Year.

Propylene Derivative Petrochemical Project (PDPP) at Kochi Refinery

The project envisages production of niche Petrochemicals utilizing Polymer Grade Propylene produced from the Petro Fluid Catalytic Cracking Unit (FCCU) being set up as a part of IREP. The PDPP project envisages production of Acrylic Acid, Oxo Alcohols and Acrylates, utilizing approximately 250,000 MT per annum of Polymer Grade Propylene.

The approved cost of the project is Rs. 4,588 crores with scheduled completion in May, 2018. The cumulative expenditure on the project is Rs. 324 crores as on 30th June, 2016.

Conversion of CRU to Isomerization (ISOM) Unit at Mumbai Refinery

The project envisages conversion of Catalytic Reformer Unit (CRU) to Isomerization Unit (ISOM) along with associated facilities. This would enable Mumbai Refinery to meet 100% Euro IV MS production. The approved cost of the project is Rs. 725 crores with scheduled completion in December, 2016. The project has achieved an overall physical progress of 83.2% as on 30th June, 2016 with a cumulative expenditure of Rs. 276 crores. The project shall be completed by 31st December, 2016 well in time to meet the requirement of 100% BS IV auto fuels by April, 2017.

Installation of Diesel Hydrotreatment Unit (DHT) at Mumbai Refinery

The project envisages installation of 2.6 MMTPA capacity DHT to meet the Government mandate of producing 100% BS-IV HSD with effect from April, 2017. The project also involves setting up of associated facilities such as new Amine Regeneration Unit (ARU) and revamp of existing Sour Water Stripped Unit (SWS) to maximize capacity of Sulphur Recovery Unit trains C & D. The approved cost of the project is Rs. 2,443 crores with scheduled completion in December, 2017. The project has achieved an overall physical progress of 51.2% and incurred cumulative expenditure of Rs. 228 crores as on 30th June, 2016. As per Auto Fuel Policy, the BS IV fuels should be made available by April, 2017. All efforts are being taken to complete the DHT part of project by then and other facilities included in the project shall be completed in December, 2017 as scheduled.

Ennore Coastal Terminal Project

The project envisages construction of Petroleum, Oils & Lubricants (POL) Terminal at Ennore with tankage of 117,035 Kl (gross) for storing MS and HSD, receipt through tanker from Ennore Tank Terminal Pvt. Ltd. (ETTPL) and product dispatch by road (16 bay gantry). The approved cost of the project is Rs. 393 crores with scheduled completion in April, 2018.

Palakkad LPG Terminal Project

The project envisages construction of 3 X 1450 MT Mounded Storage Vessels, 8 bays Tank Lorry Decantation Gantry, LPG Pump House (20M X 8M) and associated facilities. The approved cost of the project is Rs. 184 crores with scheduled completion in December, 2017.

LPG Import Facility at Haldia

The project envisages construction of 2 X 15000 MT refrigerated storage tanks for Propane & Butane, facilities for Ocean tanker unloading, Propane and Butane heating, Ethyl Mercaptan Dosing, and bulk despatches. This also entails laying of a twin pipeline (one for Propane and the other for Butane) from the jetty to the terminal.

The approved cost of the project is Rs. 694 crores with scheduled completion in October, 2018.

BS VI MS Block Project at Kochi Refinery

As per the directives of Ministry of Petroleum and Natural Gas and the Auto Fuel Policy guidelines, Kochi Refinery plans to implement a BS VI MS Block Project. Thereafter, the Refinery will be able to produce Petrol and Diesel complying with BS VI specifications. The estimated cost of the project is Rs. 3,313 Crores and it is expected to produce BS VI compliant auto fuels by April, 2020. The Project Management Contract has been awarded and application has been made for Environmental Clearance. Licensor selection is in progress.

Gasoline Hydro Treatment Project at Mumbai Refinery

Mumbai Refinery is implementing a Gasoline Hydro Treatment Project to produce 100% BS VI MS. The estimated cost of the project is Rs. 554 Crores and with completion of this project it is expected to produce 100% BS VI auto fuels by April, 2020 to meet the Auto Fuel Vision & Policy 2025 requirements. The Project Management Contract has been awarded and application has been made for Environmental Clearance. Licensor selection is in progress.

RESEARCH & DEVELOPMENT (R&D)

The current marketplace is moving towards a sustainable development framework without which our future would be at risk. To keep pace with current market trends and demands, the Research and Development Centres of BPCL are proactively engaged in the development of cleaner fuels/fuel additives and innovative products/ process technologies to reduce environmental footprints while improving the Company''s profitability. The Company''s Corporate R&D Centre is at Greater Noida, Uttar Pradesh, Product & Application Development Centre is at Sewree, Mumbai and the in-plant R&D Centre is located at Kochi Refinery. The Research and Development Centres of BPCL are also providing advanced technical support for Refinery processes, lubricant formulations and improved product/process developments. The R&D centers are broadly divided into four categories, as per core research areas: (a) Technical support to SBUs (b) Development of energy efficient technologies for fuel and chemical production, (c) New product and additive development and (d) Alternative fuels and energy. R & D areas and its benefits are summarized in Annexure A to the Directors'' Report.

NON-CONVENTIONAL ENERGY INITIATIVES

BPCL is pursuing non-conventional energy initiatives with great zeal so as to contribute meaningfully towards mitigating the risks of climate change.

During the year, BPCL has commissioned 6.3 MW capacity Windmills at Hanumanthappa in Devangere District in Karnataka,4 MW capacity Solar Power Plant at Bina, MP and 1.05 MW capacity solar power plant at Corporate R&D Centre at Noida in line with its Renewable Energy policy. Under the wind energy project, BPCL has installed 3 Wind Turbine Generators (WTGs) with a capacity of 2.1 MW each. The machines are of the latest technology with a hub height of 120 meters which is the highest in India at present. The power generation potential is also higher at this hub height. The machines are performing extremely well.

The 4 MW Solar Power plant is supplying High Tension power to Bina Despatch terminal and Bina Kota Pipeline Pumping Station.

Further, smaller KW scale Solar Plants with total capacity of 1,500 KW have been installed in 353 Retail Outlets. Currently, BPCL is assessing the feasibility of setting up rooftop Solar Plants at its various POL installations and LPG plants. Developing more grid connected wind power plants is also being explored.

INDUSTRIAL RELATIONS

Healthy Industrial Relations practices were observed throughout the year, which ensured higher productivity and a harmonious IR climate across the Organization. The efforts to promote employees'' participation continued during the year, with focus on productivity enhancement and employee well-being. There were no cases of any industrial unrest.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

At BPCL, energizing lives through Corporate Social Responsibility (CSR) initiatives is a commitment we have pledged to fulfill as a Corporate Citizen. CSR being ingrained in our DNA, we constantly endeavor to maximize the positive impacts of our activities and ensure the benefits reach all our stakeholders. We have made significant progress over the years in our core thrust areas of Education, Water Conservation, Skill Development, Health & Hygiene and Community Development. Through our CSR initiatives, we have strived to improve the livelihood opportunities and achieve sustainable changes in the communities neighboring our businesses across the country as well as in rural and tribal areas. In our constant endeavour to build a sustainable partnership with society, we have scaled up existing projects, taken up newer initiatives and exited from those that have been taken over by the stakeholders involved. Quality education is one of our core thrust areas under CSR. It is an important medium to address the issue of inequality in the country. Education contributes to an individual''s well-being as well as the overall development of society. Hence, the projects supported by us under education are primarily focused on improving the learning levels of students, capacity building of teachers and creating facilities to minimize hurdles in the learning process. In our efforts to contribute to the above, we have reached out to over 6.5 lac children since 2010. BPCL had started the project Computer Assisted Learning (CAL) in 2009-10, with 11 Zilla Parishad schools in Uran. Subsequently we have scaled up to over a 100 schools in Mumbai, Uran, Panvel (Maharashtra) and Lucknow (UP). Currently, we are present in 20 centres in Jaipur (Rajasthan), 31 centres in Mumbai and 26 centres in Solapur (Maharashtra) in addition to 42 centres in Uran and 15 centres in Lucknow, thus taking computer education to 37,326 students in 169 schools. We are steadily working towards empowering the School Management Committees as well as local Government bodies to take over the project ownership for achieving sustainability. In 2009-10, when we started in Uran there was no computer education in any Zilla Parishad school. BPCL took the challenge of reaching out to each and every Zilla Parishad school in the Uran block. By the year 2015-16, we covered all Zilla Parishad schools in the entire block of Uran. We have faced several challenges like accessing remote villages where enrolments were low, electricity was an issue, classrooms were not available and other such concerns. But we have come up with innovative solutions to address these problems in order to take computer education to every Government school in Uran.

The Science Education Project for students of Government schools near Solur, Bangalore (Karnataka) has been extended to Government schools in Mumbai. The project focuses on experiential learning models based on science concepts. It reaches the students through a mobile science lab. This project has made hands-on science education available among poor rural children and teachers. The project in Bangalore consists of a Science Centre hub, mobile science lab, lab-in-a-box activities and a "Young Instructor Leader (YIL)" program. This YIL program is focused on democratizing leadership development and unlocking human potential through the ''students-teach-students'' model. So far, we have reached out to over 8,500 children in the last one year. Our mega scale District-wide Project Akshar (Read India) for impacting learning levels of children through learning camps with NGO partner Pratham Education Foundation, was supported by BPCL in 19 blocks for primary students in District Nandurbar (Maharashtra), Sagar (Madhya Pradesh), Jaipur and Dausa (Rajasthan). We have ensured the improvement in learning level in Language and Mathematics through learning camps. At many locations, we have implemented the Read India plus model where focus has been on higher competencies like comprehension and application of knowledge. We have also reached out to upper primary students in 6 blocks of Nandurbar and Sagar. 1,160 schools, 7,970 students from Standard I-II, 20,865 students from Standard III-V, 15,844 students from Standard VI-VIII have been covered. We continue supporting the education of tribal students in Sundergarh districts of Odisha. Around 2,550 primary students from tribal villages from 31 schools in 7 Gram Panchyats from Kuarmunda block of Sundargarh district were given access to quality education through remedial classes. Similarly, we worked with 14 Government rural schools in Coimbatore District. In this project, 372 academically low performing students from Standard VI-IX were given remedial classes to enhance their learning levels in Tamil, Mathematics and English. We have also successfully completed the third batch of our in-house project "Saksham" for professional development of primary teachers and principals from low income schools. This project aimed at encouraging teachers to use new techniques for teaching, classroom management as well as developing new teaching materials according to the requirement of the class. By working with the teachers and school management, we are effecting a sustainable change in the existing education system. During the year, this project reached out to 122 teachers from primary and upper primary classes from 50 schools.

In order to encourage students from Government schools to read from an early age and try to inculcate the habit of reading, we continued to support 25 libraries in Mumbai and Delhi, reaching out to 7,040 students. Library books are classified as per the difficulty level so that students can choose a book as per their reading ability. With an objective to empower underprivileged unemployed youth, women and persons with disabilities near our businesses and also equip them with skills, we have several NGO partners in different parts of the country. Placement linked vocational training of 1,000 youth was supported by BPCL in Warangal and Nalagonda districts from Telangana and Krishna district of Andhra Pradesh. Training was given in hospitality services, tailoring, retail supervisory, and computer fundamentals with computer accounting for the youth and women. Over 70% of these beneficiaries have been placed or are gainfully self-employed.

Along similar lines, in Kolkata, we supported the vocational skill training of 80 disabled and underprivileged youth from economically backward families in Desktop Publishing. We also supported the skill building of the workforce in caring for the elderly. This project addresses two critical needs, adequately improving the quality of life of the elderly and providing employment opportunities for the unemployed youth. In our innovative program named "Sanket", we have completed one year of vocational training for persons with autism. The training is given through computers and iPad for 30 adolescent autistic students.

During the year, our water project, ''Boond'' has covered 36 villages from Tamil Nadu, Karnataka, Maharashtra and Rajasthan. Boond, which is a water conservation project through rainwater harvesting, now spans across the States of Tamil Nadu, Andhra Pradesh, Rajasthan, Maharashtra, Karnataka and Uttar Pradesh. Leveraging the strengths of the local population, we have formed Village Water Committees that have taken over the governance and maintenance of the various water structures we have built. The water needs of over 7,000 families have been met and over 10 crore litres of water storage capacity have been created through construction/renovation of tanks, ponds, sub-surface dams, wells, check dams and cordons. In addition to this, our project also supports sustainable employment through new and improved agricultural practices like crop rotation, mulching, newer crops, innovative methods of irrigation and horticulture, thereby increasing the availability and storage of surface water and ground water, increasing availability of drinking water for cattle, decreasing levels of migration, improving the quality of life of villagers and positively affecting the environment.

The Driveway Salesmen (DSMs) and LPG Delivery boys in our Marketing networks are critical players in our value chain. These people and their families are not protected against major expenses arising from unforeseen health issues. The Company had initiated a health insurance scheme in 2014-15 through which an additional 19,000 DSMs, LPG delivery boys and PCVO crew in 24 states have been covered to the extent of Rs. 1 lac for self and their families for one year. This decreases their financial burden especially in cases of recurring illness and major medical emergencies.

With an objective to improve and encourage institutional care and safe delivery of babies under supervised medical attention for tribals, we work in HD Kote Taluka, Mysore District of Karnataka by supporting ''Reproductive and Child Healthcare''. Over 60,000 villagers and specifically 9,183 tribals from 57 Tribal hamlets are benefitted from this project, where there has been a steady increase in institutional deliveries. We were successful in ensuring 89% institutional deliveries and 99% birth dose immunizations. Awareness of Government Health Schemes including lectures on community topics like nutrition and infant mortality are being promoted through regular meetings with community members. In response to the Hon''ble Prime Minister''s call to the Nation to give priority under CSR for construction of toilets as part of the ''Swachh Vidyalaya Campaign'' under the ''Swachh Bharat Abhiyan'', BPCL had undertaken construction/repairs of dysfunctional toilets totaling to 1,910 toilet blocks in Government schools in the states of West Bengal, Andhra Pradesh, Telangana, Bihar, Odisha, Madhya Pradesh and Chhattisgarh, spread across 26 districts.

BPCL deputed 40 officers in the field at respective locations to ensure quality of construction and timely completion of the project. This project was implemented overcoming several obstacles pertaining to logistics, power and manpower availability at many remote and inhospitable terrains within the scheduled deadlines through extensive monitoring and continuous follow-up with all stakeholders and agencies involved. We have also endeavoured to provide for water in the toilet blocks so as to ensure cleanliness and hygiene. The Annual Report on CSR activities in the specified format is provided in Annexure B. The CSR Policy may be accessed on the Company''s website at the link https://bharatpetroleum.com/Social-Responsibility/ Corporate-Social-Responsibility/Policy.aspx

PROMOTION OF SPORTS

Our sportspersons continued to excel in the national as well as international sports arena in the fields of Cricket, Hockey, Badminton, Chess, Table Tennis, Bridge, Kabaddi and Volleyball. BPCL sportspersons won several distinctions and applause. Our Hockey and Volleyball teams won most of the major All India tournaments. Six of our Hockey players namely S. V. Sunil, Manpreet Singh, Md. Amir, Birendra Lakra, Devinder Walmiki and Harmanpreet Singh were part of the Indian team which won the Bronze Medal at the Hockey World League. Tushar Khandker, ex-Olympian is the Assistant Coach of the Indian Hockey team.

Our Kabaddi team excelled once again, winning a number of open tournaments. Most of our Kabaddi players, which include leading performers - Rishank Devadiga, Nilesh Shinde, Vishal Mane were part of the successful Pro-Kabaddi League 2016.

In Cricket, Manish Pandey and Dhawal Kulkarni have been selected in the Indian team. In individual sports, Saina Nehwal led the Indian team - Jwala Gutta, P.V. Sindhu and Ruthvika Shivani Gadde to win the Bronze medal at the Uber World Cup 2015-16. Our latest recruit, badminton player Ruthvika Shivani Gadde bagged the Gold Medal at the South Asian Games held during the month of February, 2016 at Guwahati defeating P.V. Sindhu in the finals. Our leading Chess player, P. Harikrishna continued to be the second highest Indian in the World Chess rankings, behind the legendary chess player, Vishwanathan Anand. At one point of time during the year, Harikrishna even upstaged Anand to be the highest ranked Indian in the World.

In Archery, Atanu Das has been performing exceptionally well and was even ranked No 1 in the country. Individual sportspersons from BPCL who have already qualified for the Rio Olympics are Saina Nehwal, Jwala Gutta and P. V. Sindhu in Badminton and Soumyajit Ghosh in Table Tennis. Our young Scholarship players excelled in National and International events in the open and junior categories. BPCL also bagged the Second Runners-up "President''s Trophy" of Petroleum Sports Promotion Board (PSPB) during the year 2015-16. We continue to support sportspersons through various support mechanisms such as providing financial assistance for International events, assistance towards coaching, encouraging their performances through defined Cash Awards and supporting young and promising players by providing scholarships. It has been our endeavour to promote sports and sportspersons and be a facilitator for enabling them to excel at National and International levels.

RESERVATION AND OTHER WELFARE MEASURES FOR SCHEDULED CASTES/SCHEDULED TRIBES/ OTHER BACKWARD CLASSES AND PERSONS WITH DISABILITIES

The Presidential Directives and other guidelines issued from time to time by Ministry of Petroleum & Natural Gas, Ministry of Social Justice and Empowerment and the Department of Public Enterprises relating to reservations/concessions for Scheduled Castes/ Scheduled Tribes/Other Backward Classes are being followed meticulously in letter and spirit. We have put in place a robust monitoring mechanism for sustained and effective compliance uniformly across the Organisation. As per the Directives, the Company maintains Rosters which are regularly inspected by the Liaison Officer of the Corporation as well as the Liaison Officer of MoP&NG to ensure proper compliance.

The Company encourages SC/ST and economically backward students by awarding scholarships to pursue courses at the Industrial Training Institute and secondary school education up to graduation level. The provisions under "The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation), Act, 1995 relating to providing employment opportunities for Persons with Disabilities (PWDs) are fully complied with.

Details relating to representation/appointment of SC/ ST/OBC candidates and Persons with Disabilities are enclosed as Annexure C.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Official Language Implementation Committees perform the task of reviewing the progress made in Official Language Implementation on a quarterly basis. The Committees take decisions based on the annual programme issued by Ministry of Home Affairs, besides the provision of the Official Language Act and Rules. They functions at the Corporate, Regional, Refinery, Area Level and major location levels.

The First Sub-Committee of the Parliamentary Committee on Official Language inspected the offices situated at Meerut, Kolkata, Lucknow, Hyderabad, Guwahati and Jodhpur, whereas the Draft & Evidence Committee visited Kochi on 11.01.2016. The Committees appreciated the overall work done so far with regard to Official Language Implementation.

Officials from Department of Official Languages, Ministry of Petroleum & Natural Gas visited Roorkee LPG Plant, Hyderabad LPG Plant, Jaipur LPG Plant, Patna, Loni Dispatch Unit, Chennai, Udaipur LPG Plant, Chandigarh, Rajkot and Ahmedabad Territory and our Head Office at Mumbai.

Rajbhasha Vibhag of Ministry of Home Affairs inspected 11 locations on an all India basis. The efforts taken by BPCL for promotion of Hindi were appreciated by the committees. Hindi fortnight was celebrated at all major locations during the month of September 2015, various Hindi competitions wing organized. In line with the directives of MoP&NG, a certificate was given to such staff who had done excellent job in Hindi Implementation from all Regions/Refineries as Rajbhasha Gourav Puraskar. World Hindi Day was celebrated on 10th January 2016 across all Regions and Refineries. At all BPCL Offices, Hindi Unicode supported Software Indic Language was loaded. Besides, for on-line training of Hindi ISM V6 software/Indic Language Software, a web page has also been developed. BPCL bagged the 1st Rajbhasha Protsahan Cup prize from MoP&NG for best Hindi Implementation among PSUs. The Annual Program of Official Language implementation for the year 2015-16 was conducted with our C&MD issuing annual check points. Our 72 offices have been notified under sub-rule 10(4) of Official Language Rules, 1976 during the year on an All India basis. The total number of offices notified till date is 114. All the Regional/Refinery Hindi Cells have supported the activities of the Town Official Language Implementation Committees. A tribute was paid to Dr. APJ Abdul Kalam on 15th August, 2015 through a short Hindi film.

A total of 231 children of our employees were give Rajbhasha Awards for securing more than 60% in Hindi in the 10th/12th standard 24 Hindi workshop and 76 Hindi Indic software training programs were organized during the year. Hindi Co-ordinators Conferences were organized by all Regions/Refineries during the year.

Swachh Bharat Abhiyan Month was organized in Hindi. ''Gandhi Ek Andhi'' was also enacted in-house.

CITIZEN''S CHARTER AND PUBLIC GRIEVANCES REDRESSAL

BPCL has constantly endeavoured to set new benchmarks in customer service standards, thereby meeting customer expectations. The Citizen''s Charter published by BPCL, which is available on our Corporate Website in both Hindi and English versions, specifies the customer rights with respect to standards, quality and time-frame for service delivery, provides insights into the range of products and services offered to our customers and gives an overview of the marketing activities of the Corporation, highlighting the policy guidelines and processes on marketing of petroleum products. The Citizen''s Charter extensively covers the Grievance Redressal Structure set-up in BPCL with details of Nodal Officers spread across States/UTs to help in speedy resolution of customer complaints. It is updated periodically to be in consonance with the customer expectations, business requirements and policy changes. The Citizen''s Charter can be accessed at our website www.bharatpetroleum.in. The Grievance Redressal framework in BPCL transcends across business units and complaints resolution is continuously monitored from the Corporate Office. The grievances received on the web-based Public Grievances Portal, "Centralized Public Grievance and Monitoring System" (CPGRAMS) of Government of India (under the Department of Administrative Reforms & Public Grievances for all Government offices and PSUs), are attended to and resolved/redressed by the Nodal Officers for Grievance Redressal in States/UTs. During the year, we received 4,323 grievances on this portal. Timely resolution of these cases was possible due to a robust redressal framework and monitoring system. BPCL has its own centralized Customer Care System (CCS) - "SmartLine," a web-based platform that has made it possible for customers to connect directly to Bharat Petroleum and its network. The "SmartLine", where customers can log complaints, suggestions and feedback, either through BPCL website or by calling up a toll-free number, is designed to track all interactions with the customer and facilitates complaints redressal well within the stipulated time frame. The built-in escalation matrix in the system helps timely redressal of complaints.

The Right to Information, is an extremely important authority for any citizen of a democratic Nation. The RTI Act came into force effective 2005 and BPCL has effectively implemented the same from the beginning. In order to effectively respond to the RTI queries and appeals addressed to BPCL, we have 88 Central Public Information Officers (CPIO) and 11 Appellate Authorities (AA) spread across the country. BPCL has developed an in-house RTI package where all the applications are logged, monitored and replied within the stipulated time. Continuous training programmes and workshops for CPIOs/AAs, Officials across the Organisation are being carried out and they are sensitized/updated on all aspects of the Act. Regular circulars, newsletters, guidelines, case studies and Central Information Commission (CIC) Judgements are communicated from the Corporate Office to the field. We also ensure that CIC Decisions are fully complied with. In our corporate website, we have a separate section dedicated for RTI. During the year 2015-16, we have received 3,896 RTI queries and responded to all in time. BPCL has organized 6 RTI Workshops/training programmes for the new/ existing CPIOs and AAs to stress on the importance of RTI and equip them to handle RTI in true spirit.

MICRO & SMALL ENTERPRISES

BPCL has been fully abiding with the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order and 20% of our annual goods and service procurements are done through MSEs. The "Purchase Preference Clause" for MSEs has been incorporated in the "General Purchase Conditions" of all the tenders. As per the existing Purchase Preference Policy of the Government of India, the job is awarded to MSE vendors, provided they quote within a price band of L1 15 % and bring down the price to L1 price. In such a case, MSE vendors are allowed to supply a total of at least 20% of the tendered value and in case there is more than one such MSE, the supply is shared proportionately. Additionally, 20% of this 20% portion i.e. 4% of the total tender quantity is reserved for SC/ST entrepreneurs in the MSE category. BPCL had put up a MSE procurement plan for 2015-16 on its website. It can be viewed at https://bharatpetroleum.com/Bharat-Petroleum-For/ Business-Associates/Vendors.aspx BPCL actively participated in the National Vendor Development Programme cum Exhibition conducted by MSE Consortium at Thane, Maharashtra. BPCL also promoted the MSE procurement during Make In India week held in Mumbai. We have organized and attended around 15 programs across India to promote the Public Procurement Policy for MSEs. All India Premier Vendor Workshop was held during November, 2015 in Mumbai which was attended by MSE vendors with special sessions on MSE policies/guidelines being conducted.

BPCL has achieved 23.06% procurement through MSEs for the year 2015-16 as against the target of 20%. The total procurement value for BPCL where MSEs could have participated is Rs. 5,434.08 crores and the actual value procured from MSEs is Rs. 1,253.30 crores.

VIGILANCE

Vigilance is an integral part of good governance in any organisation. Preventive Vigilance - a step ahead, is a proactive and continuously evolving process that utilises global historical wisdom to anticipate vulnerabilities and recommends systemic measures to ensure minimum possibilities of their occurrence under all possible circumstances.

This also involves outlining of factors like susceptibility, sensitivity and visibility of all involved processes and subject these to a system of continuous and consistent online appraisal, thereby throwing up regular alarms and cautions for any abnormal indications to alert system operators, while maintaining an indelible and easily traceable log of all activities and interventions for future studies.

Vigilance assists in identification of susceptible areas in existing procedures and processes by carrying out system studies, Chief Technical Examiner type inspections for high value projects, scrutiny of tender files and inspections of operating locations, retail outlets and LPG distributorships.

In order to have all the CVC circulars and guidelines readily available for all the stakeholders of the Company for their ready reference, a Compendium of CVC circulars and guidelines was compiled and distributed to all stakeholders within the Corporation. Due to the consistent efforts of CVO, comprehensive guidelines for procurement and contracting procedures were compiled and drafted by the stakeholders after detailed deliberations. The team comprised officials from Mumbai and Kochi Refinery, Chief Procurement Officer - Marketing and Refinery and Finance Department under the leadership of Director (Refineries). These comprehensive guidelines cover the procedures to be followed by the Businesses and Entities for their requirement of procurement of goods, contracts and services. In a nutshell, a common comprehensive guideline has been institutionalized.

Vigilance Officers have conducted Vigilance Awareness sessions for our employees working at operating locations and regional offices during their visits, aimed at enhancing knowledge and awareness on the operational aspects of various guidelines and standard operating procedures in vogue.

In order to increase visibility and transparency in our interactions with vendors, contractors, suppliers and other service providers, it was ensured that all tenders are being published on the Central Public Procurement (CPP) portal of the Government of India website. Corporate Vigilance also carried out thorough investigations into complaints and source information. Complaints, including those received online, were investigated, both directly by Team Vigilance and through Businesses/Entities within the stipulated time frame. BPCL''s internal website "Intralink", as well as Vigilance portal available on BPCL''s corporate website, has the provision to lodge complaints as well as provide a platform for regular interaction with employees, customers and others concerned.

The Vigilance portal creates awareness on good governance, shares knowledge on ethical practices and proactive vigilance and acts as a powerful tool to connect all the employees. This website also provides useful links of Central Vigilance Commission, Department of Personnel & Training Government of India. As a part of capacity building, Vigilance Officers have undergone a training programme conducted by Gujarat Forensic Sciences University at Gandhinagar near Ahmedabad. Team Vigilance studied subjects like "Role of Forensic Psychology in Investigation & Prevention of Corruption" and "Forensic Investigative Techniques". Gujarat Forensic Sciences University is the only university of forensic sciences in the world as on date for research and development of forensic sciences. C&MD and GM (Vigilance) in the presence of Director (Human Resources), Director (Finance) and other senior BPCL officials and staff, administered pledge at BPCL Corporate Office in Mumbai on 26th October, 2015 at at the launch of the Vigilance Awareness Week 2015 from 26.10.2015 to 31.10.2015. Shri Keshav Kumar, IPS, Joint Director, Central Bureau of Investigation, Mumbai Zone was the Chief Guest, who dwelled upon the latest developments in forensic sciences. Similarly, Vigilance Awareness Week was launched with administering of the pledge by the Chief Guest in the presence of senior BPCL Officials in all the four Regions and Mumbai and Kochi Refineries, Bharat PetroResources Limited and Petronet CCK Limited. During this period, various activities such as Awareness

Sessions, Essay Contests, Question Answer Sessions, Vigilance Quiz, Debate Competition, Painting Contest and Skit program (topic: Fighting Corruption) were conducted for employees and school children. Integrity Clubs (IC) were launched in schools in Mumbai and Chennai for propagating ethical values in school children so that they, in turn carry these values to their families, friends and society. The members of the club are called Young Champions of Ethics (YCEs). Imparting ethical values shapes the child''s attitude towards people and society and helps in mental growth in the child and supports his ambitions and values. "Choti Choti Batein" is a value based teachings initiative to rekindle values amongst school children. They were conducted by Vigilance Officers and through this initiative, we have covered 10 schools in Mumbai and touched around 2,000 students from various strata of society. It was a landmark achievement for BPCL Vigilance to implement Six Sigma. With active support from Total Quality Management Department, Mumbai Refinery, has started the journey of Lean Six Sigma. The Corporate team underwent the training and the process helped them to standardise the formats for scrutiny of tenders and Annual Property Returns. With this, BPCL Vigilance becomes the first department amongst Public Sector Undertakings to implement Lean Six Sigma. A special Journal "Vigilance Plus "was released to all stakeholders to commemorate the activities carried out during Vigilance Awareness Week 2015 and other events conducted by Vigilance department. Staff members across the country contributed articles in this magazine by narrating their experiences. Vigilance is an important instrument available to the management for improving the overall performance of the organization as it promotes transparent business transactions, professionalism, productivity, promptness and ethical practices. It also assists in systemic improvements, curbing possibilities for corruption. Therefore, Preventive Vigilance helps in improving efficiency and effectiveness of the personnel as well as the organization.

SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES

The Group consists of 5 Indian Subsidiaries and 4 Foreign Subsidiaries as on 31st March, 2016. Further, the Company has 19 Associate Companies including Joint Venture Companies within the meaning of Section 2(6) of the Companies Act, 2013 (''the Act'').

A separate statement containing the salient features of the financial statement of Subsidiaries/Associates/Joint Venture Companies in Form AOC-1 pursuant to provisions of Section 129(3) of the Act, is attached along with the financial statement.

The Company has placed its financial statements including consolidated financial statements and all other documents required to be attached thereto, on its website www.bharatpetroleum.in as per Section 136(1) of the Act. Further, the Company has also placed separate annual reports/audited accounts in respect of each of its subsidiaries in its above website. A copy of the said documents will be available for inspection and provided to any shareholder of the Company who asks for it. The policy for determining material subsidiaries is posted on the Company''s website at the link https://bharatpetroleum.com/About-BPCL/Our-Policies. aspx

The performance of Subsidiaries/Associates/Joint Ventures and their contribution to overall performance of the Company and financial position are provided in Note No. 50 of the Consolidated Financial Statements forming part of this Annual Report.

SUBSIDIARY COMPANIES

Numaligarh Refinery Limited (NRL)

NRL was incorporated in the year 1993 with an authorised share capital of Rs. 1,000 crores. The paid up share capital of NRL as on 31st March, 2016 was Rs. 735.63 crores of which BPCL holds 61.65%. NRL is a Category-I Miniratna PSU and operates a 3 MMTPA Refinery at Numaligarh in Assam. Besides the Refinery, NRL has two marketing terminals, one at Numaligarh and the other at Siliguri for evacuation of products. NRL also has a 10 TMTPA LPG Bottling Plant at Numaligarh. NRL''s crude throughput during 2015-16 was 2.52 MMT against 2.78 MMT in the last year. Capacity utilization was restricted to 84.0% compared to 92.5% in the previous year. In 2015-16, NRL''s distillate yield at 90.4% was the highest among PSU oil refineries in the country. This has been the fifth consecutive year of such an achievement recorded by NRL. During 2015-16, Specific Energy Consumption was at 50.4 MBN, among the best in the industry. Energy Intensity Index (EII) during the year was recorded at 96.6, marking an improvement over previous year''s EII of 97.2.

During the year, NRL added two new products to its portfolio, viz., paraffin wax and nitrogen and exported HSD to Bangladesh and paraffin wax to Nepal. The Financial Year ended 31st March, 2016 saw NRL''s Revenue from Operations reaching Rs. 10,031.44 crores in comparison to Rs. 9,862.42 crores in the previous year, marking an increase of 1.7%. NRL''s profit before tax for the year 2015-16 increased by 66% to reach Rs. 1,882.38 crores, as compared to Rs. 1,133.94 crores in the previous year. The Company''s profit after tax for the year was Rs. 1,224.35 crores against Rs. 719.74 crores in 2014-15. The increase in profits is mainly attributable to high distillate yield, lower energy consumption and enhanced operational efficiency. Earnings per share increased to Rs. 16.64 from Rs. 9.76 in the previous year. The Company paid an interim dividend @ Rs. 3.50 per fully paid equity share of Rs. 10/- each. The Board also recommended a final dividend of Rs. 3.50 per share for the Financial Year 2015-16. NRL paid dividend of Rs. 4.00 per share in the previous year.

As on 31st March 2016, NRL shareholders'' funds was recorded at Rs. 3,963.87 crores as against Rs. 3,354.98 crores in the previous year and its book value per share increased to Rs. 53.88 from Rs. 45.67 in the previous year.

Bharat PetroResources Limited (BPRL)

BPRL was incorporated in the year 2006 as a wholly owned Subsidiary Company of BPCL with the objective of implementing BPCL''s plans in the upstream exploration and production sector.

As on 31st March, 2016, BPRL has an authorized share capital of Rs. 3,000 crore and paid up share capital of Rs. 2,920 crore which is entirely held by BPCL, the Holding Company. BPRL has incurred a consolidated loss of Rs. 248.31 crore for the Financial Year ending 31st March, 2016. The consolidated loss was due to relinquishment of participating interest (PI) in few blocks, as prospectively assessed based on drilling results in these blocks was very poor.

The operations of BPRL are carried out through Subsidiaries and Joint Ventures, both incorporated and unincorporated, in India and abroad. BPRL currently has PI in seventeen blocks spread across six countries. Out of these blocks, seven blocks are located in India, which were acquired under different rounds of New Exploration Licensing Policy (NELP) and ten blocks are located overseas. Most of the blocks are in advanced stages of exploration, appraisal and pre-development. The total area of these seventeen blocks is around 24,375 sq km, of which approximately 88% is offshore acreage. BPRL has a wholly owned Subsidiary Company, BPRL International BV, in the Netherlands which, in turn, has three wholly owned Subsidiary Companies viz., BPRL Ventures BV, BPRL Ventures Mozambique BV, and BPRL Ventures Indonesia BV. BPRL Ventures BV has a 50% stake in IBV Brasil Petroleo Limitada, which currently holds PI ranging from 20% to 40% in six blocks in offshore Brazil. BPRL Ventures Mozambique BV has PI of 10% in a block in Mozambique, and BPRL Ventures Indonesia BV holds PI of 12.5% in a block in Indonesia. Further, BPRL has a wholly owned Subsidiary Company, Bharat PetroResources JPDA Limited in India which holds a PI of 20% in Block-JPDA 06-103, in Timor Leste. The PIs in blocks in Brazil, Mozambique, Indonesia and Timor Leste are held through these Subsidiaries. Further, the PI in respect of blocks in India and Australia are held by BPRL along with other consortium members. BPRL and its consortia have a total of 22 discoveries in respect of blocks held in five countries i.e. Brazil, Mozambique, Indonesia, Australia and India. Recently, as concrete steps towards fulfillment of its aspiration for revenue generation, BPRL has signed definitive agreements to acquire stakes in Companies in Russia which have oil & gas producing assets in their portfolio. Subsequently, in May, 2016, BPRL has formed another wholly owned Subsidiary Company i.e. BPRL International Singapore Pte Ltd in Singapore for enabling the acquisition of stakes in the Companies in Russia. Further, BPRL International Singapore Pte Ltd has formed two Joint Venture Companies as Special Purpose Vehicles (SPV) i.e. Taas India Pte Ltd and Vankor India Pte Ltd in May, 2016 along with Oil India Ltd and Indian Oil Corporation Ltd with BPRL International Singapore Pte Ltd holding 33% stake in each of the two SPVs to hold stakes in the Companies in Russia.

Petronet CCK Limited (PCCKL)

BPCL had a 73.96% stake in the equity capital of PCCKL, a Joint Venture Company promoted with Petronet India Limited with a paid up share capital of Rs. 100 crores. PCCKL has become a subsidiary in May, 2015 and later in July, 2016 it has become a wholly owned Subsidiary Company of BPCL. The Company owns and operates the 292 km long multi-product Kochi-Karur pipeline from BPCL''s installation of Irimpanam to Karur for transportation of MS, HSD and SKO. The pipeline commenced commercial operations from September, 2002. During the year 2015-16, the pumping volume amounted to 2.72 MMT in comparison to the 2.46 MMT of the previous year. PCCKL recorded revenue from operations of Rs. 107.78 crores and net profit of Rs. 59.41 crores for the Financial Year ending 31st March, 2016 corresponding to Rs. 98.27 crores and Rs. 42.96 crores respectively in the previous year.

BPCL-KIAL Fuel Farm Private Limited (BKFFPL)

BPCL has signed a Joint Venture Agreement with KIAL (Kannur International Airport Ltd) for implementation of a Fuel Farm at the newly developed Kannur International Airport at Kannur on a 74:26 equity basis. The Company has been incorporated on 18th May, 2015 and the authorized capital of the Company is Rs. 18 Crores. As of now BPCL has made a contribution of Rs. 4.44 crores to BPCL-KIAL.

JOINT VENTURE COMPANIES

Bharat Oman Refineries Limited (BORL)

Bharat Oman Refineries Limited is a Joint Venture Company of BPCL with Oman Oil Company S.A.O.C. (OOC). BPCL and OOC have an equity stake of 50% each in BORL''s paid up share capital of Rs. 1,777.23 crores as on 31st March, 2016. BPCL has also subscribed to Share Warrants of BORL of Rs. 1,585.68 crores. Further, the State of Madhya Pradesh has also subscribed to Rs. 26.90 crores of Share Warrants in BORL. During the year 2015-16, Bina Refinery processed 6.40 MMT of crude oil, achieving a capacity utilization of 107%, as compared to 103% in the previous year. This is the highest capacity utilization achieved since commencement of operations in June, 2011. During the year 2015-16, BORL has achieved sales of 6.13 TMT, as against 5.59 TMT in the previous year. The Company has reported Gross Revenue from Operations of Rs. 26,028 crores in the year 2015-16, as compared to Rs. 29,331 crores in the corresponding year. The decrease in revenue is on account of the fall in prices of petroleum products.

The GRM for the year 2015-16 stood at USD 11.7 per barrel with an overall gross margin of Rs. 3,526 crores. The previous year''s GRM was of USD 6.1 per barrel with an overall gross margin of Rs. 1,681 crores. The net profit after tax was registered at Rs. 366 crores during the year 2015-16, as compared to a net loss of Rs. 790 crores in the previous year. This is the first time that BORL has recorded a profit.

The Company has launched a project for low cost de-bottlenecking of its existing facilities to enhance its current capacity to 7.8 MMTPA in the next 3 years and also to meet product quality specifications as stipulated in the Auto Fuel Vision and Policy 2025 guidelines. Basic engineering and design work for the process units has been completed and detailed engineering of open-art as well as licensed units has commenced.

Petronet LNG Limited (PLL)

PLL was formed in April, 1998 for importing LNG and setting up LNG terminals with facilities like jetty, storage, regasification etc. to supply Natural Gas to various industries in the country. The Company has an authorised capital of Rs. 1,200 crores and paid up capital of Rs. 750 crores. PLL was promoted by four public sector companies viz. BPCL, Indian Oil Corporation Limited (IOC), Oil and Natural Gas Limited (ONGC) and GAIL (India) Limited (GAIL). Each of the promoters holds 12.5% of the equity capital of PLL. PLL is a listed Company. BPCL''s equity investment in PLL currently stands at Rs. 98.75 crores. As at 31st March, 2016, PLL had a consolidated net worth of Rs. 6,424.47 crore.

During the year 2015-16, PLL registered a consolidated Revenue from Operations of Rs. 27,222.95 crores as against Rs. 39,626.97 crores reported in 2014-15. The Company''s net profit for the year is at Rs. 928.53 crores against Rs. 904.80 crores in the last year. It recorded an EPS of Rs. 12.39 during the year under review as against EPS of Rs. 12.06 in 2014-15. The PLL Board has recommended dividend of Rs. 2.50 per share for the Financial Year 2015-16 against Rs. 2.00 per share paid last year.

Indraprastha Gas Limited (IGL)

IGL, a Joint Venture Company with GAIL as the other co-promoter, was set up in December, 1998 with an authorised capital of Rs. 220 crores for implementing the project for supply of Compressed Natural Gas (CNG) to the household and automobile sectors in Delhi. The paid up share capital of the Company is Rs. 140 crores. BPCL invested Rs. 31.50 crores in IGL for 22.5% stake in its equity. IGL is a listed Company with the public holding 55% of the paid up share capital of the Company. IGL has commissioned over 340 CNG stations which supply environment friendly fuel to more than 8,00,000 vehicles. IGL has more than 6,36,618 domestic PNG customers in Delhi. The Company is also extending its business to the towns of Greater Noida and Ghaziabad. IGL has acquired 50% of the equity held by the financial institutions in Central UP Gas Limited and Maharashtra Natural Gas Limited, Joint Venture Companies promoted by BPCL and GAIL.

During the year 2015-16, IGL has posted Revenue from Operations of Rs. 4,064.21 crores and a profit after tax of Rs. 416.20 crore as against the figure of Rs. 4,059.64 crores and Rs. 437.73 crores respectively in the corresponding previous year. IGL has maintained a dividend of Rs. 6.00 per share for the year as was paid in the previous year. IGL''s shareholders'' funds were Rs. 2,413.23 crores as at 31st March, 2016.

Sabarmati Gas Limited (SGL)

SGL, a Joint Venture Company promoted by BPCL and Gujarat State Petroleum Corporation (GSPC), was incorporated on 6th June, 2006 with an authorized capital of Rs. 100 crores for implementing the City Gas distribution project for supply of CNG to the household and automobile sectors in the city of Gandhinagar, Mehsana and Sabarkantha Districts of Gujarat. The paid up share capital of the Company is Rs. 20 crores. As at 31.3.2016, BPCL has a stake of 49.94% in the equity capital of SGL. SGL has set up 38 CNG stations. Revenue from Operations of SGL for the Financial Year ending 31st March, 2016 was Rs. 720.08 crores and net profit was Rs. 0.97 crores, against the previous year''s figure of Rs. 905.71 crores and Rs. 110.84 crores respectively. The proposed dividend on equity shares by the Company was at the rate of Rs. 1.00 per share for the Financial Year ending 31st March, 2016 against the dividend of Rs. 2.50 per share for the Financial Year ending 31st March, 2015. To compete with alternate fuel and retain customers, the Company had introduced a Minimum Guarantee Offtake (MGO) contract at reduced Retail Selling Price (RSP) to Industrial customers from April, 2015 onwards. Major Industrial Volume is under the MGO contract and RSP of the same is reduced as compared to the previous year, thereby adversely impacting the Sales value and also profit.

Central UP Gas Limited (CUGL)

CUGL is a Joint Venture Company set up in March, 2005 with GAIL as the other partner, for implementing the project for supply of CNG to the household, industrial and automobile sectors in Kanpur and Bareilly in Uttar Pradesh. The Company was incorporated with an authorised share capital of Rs. 60 crores. The Joint Venture partners have each invested Rs. 15 crores for an equity stake of 25% each in the Company. Indraprastha Gas Ltd, our joint Venture is holding the balance 50%. CUGL has set up 16 CNG stations and is carrying on PNG operations. Revenue from Operations of CUGL was Rs. 200.61 crores and net profit was Rs. 32.61 crores for the Financial Year ending 31st March, 2016. In the previous year its Revenue from Operations was Rs. 186.81 crores and net profit was Rs. 27.52 crores. The EPS for the year was at Rs. 5.44 as against Rs. 4.59 in 2014-15. The Board of Directors has recommended payment of dividend at Rs. 1.40 per share for the current year, which is the same as that of the previous year.

Maharashtra Natural Gas Limited (MNGL)

MNGL was set up in January, 2006 as a Joint Venture Company with GAIL for implementing the project for supply of Natural Gas to the household, industrial and automobile sectors in Pune and its nearby areas. The Company was incorporated with an authorised share capital of Rs. 100 crores. The paid up capital of the Company is Rs. 100 crores. BPCL and GAIL have invested Rs. 22.50 crores each in MNGL''s equity capital. MIDC, as a nominee of the Maharashtra Government has taken 5% equity in the month of June, 2015. Balance 50% is being acquired by IGL, our Joint Venture Company from financial institutions. The Company has set up 30 CNG stations so far.

During the year 2015-16, MNGL reported net revenue of Rs. 464.78 crores and profit of Rs. 75.20 crores as against the revenue of Rs. 458.52 crores and profit of Rs. 50.58 crore in the last year. The MNGL Board has recommended a dividend of Rs. 1.50 per equity share for the Financial Year ending 31st March, 2016 as against Rs. 1.02 per share declared in the last year.

Bharat Stars Services Private Limited (BSSPL)

BSSPL a Joint Venture Company promoted by BPCL and ST Airport Pte Limited, Singapore was incorporated in September, 2007 for providing into plane fueling services at the new Bengaluru International Airport. The authorised and paid up share capital of BSSPL is Rs. 20 crores. The two promoters have each subscribed to 50% of the equity share capital of BSSPL and BPCL''s present investment stands at Rs. 10 crores. The Company commenced its operations at the new international airport in Bengaluru from May, 2008 and has also incorporated a wholly owned subsidiary, Bharat Stars Services Pvt. (Delhi) Ltd. for implementing into plane fuelling ser vices exclusively at the new T3 Terminal of Delhi International Airport.

BSSPL provides Into Plane (ITP) Services at three Open Access airports-Bengaluru, Mumbai and Delhi T3. BSSPL has taken over the complete Operatorship of 2 AFS''s of BPCL - Jaipur and Durgapur. It also provides ITP services to BPCL at Calicut, Chennai and Delhi T-1 airports.

During the year 2015-16, BSSPL has posted a revenue of Rs. 29.53 crores and profit of Rs. 2.89 crores in comparison to a revenue of Rs. 17.15 crores and profit of Rs. 2.01 crores in the last year. The Board has recommended a dividend of Rs. 0.25 per equity share for the Financial Year ending 31st March, 2016, which was the same as the previous year.

Bharat Renewable Energy Limited (BREL)

BREL was incorporated on 17th June, 2008 for undertaking the production, procurement, cultivation and plantation of horticulture crops such as karanj, jathropha and pongamia, trading, research and development and management of all crops and plantation including Biofuels in the State of Uttar Pradesh, with an authorized capital of Rs. 30 crores. The Company has been promoted by BPCL with Nandan Cleantech Limited (erstwhile Nandan Biomatrix Limited), Hyderabad and the Shapoorji Pallonji group, through their affiliate, S.P. Agri Management Services Pvt. Ltd.

Due to non-viability, the operations of this Company have been closed down from September, 2014 and Company Petition No 5 of 2014 was filed before the Hon''ble High Court of Allahabad (Lucknow Bench) for winding up of BREL. By Order dated 21.12.2015, Mr. Justice Devendra Kumar Upadhyaya ordered that the Company be wound up and instructed the Official Liquidator to proceed in accordance with the provisions of the Companies Act.

Matrix Bharat Pte. Limited (MXB)

MXB is a Joint Venture Company incorporated in Singapore in the year 2008 for carrying on the bunkering business and supply of marine lubricants in the Singapore market as well as international bunkering. The Company has been promoted by BPCL and Matrix Marine Fuels L.P. USA, an affiliate of the Mabanaft group of Companies, Hamburg, Germany. BPCL has subscribed 20 lakh shares for an equivalent sum of Rs. 8.41 crores. The other partner has contributed equally to the share capital. Matrix Marine Fuels LP USA has subsequently transferred their share and interest in the Joint Venture in favour of Matrix Marine Fuels Pte Limited, Singapore another affiliate of the Mabanaft group.

MXB has posted a revenue of USD 221.82 million and earned a profit of USD 1.47 million for the year ending 31.12.2015, as compared to a revenue of USD 636.38 million and a profit of USD 1.62 million in the previous year. Turnover has dropped by 65% in 2015 mainly due to the steep drop in fuel oil price in the international market coupled with lower volume during the year.

Petronet India Limited (PIL)

BPCL has 16% equity participation with an investment of Rs. 16 crores in PIL which was formed as a non-government financial holding Company to give impetus to the development of a pipeline network throughout the country. PIL has facilitated pipeline access on a common carrier principle through Joint Ventures for pipelines put up by them viz., Vadinar-Kandla, Kochi- Coimbatore-Karur and Mangalore - Hassan - Bangalore. PIL registered other income of Rs. 14.08 crores and a net profit of Rs. 13.72 crores for the Financial Year ending 31st March, 2016 as against other income of Rs. 1.54 crores and a net profit of Rs. 1.14 crores in the previous year.

The changes in pipeline policy have affected the future of the Company as interested Companies are permitted to undertake pipeline projects. PIL does not have any new projects in hand and is considered not viable. PIL has recently sold its 26% share in Petronet CCK Ltd to BPCL. Accordingly, the process of divesting PIL''s 26% equity in the balance two Joint Venture Companies promoted by it is in progress. The Company would be wound up thereafter.

Delhi Aviation Fuel Facility Private Limited (DAFFPL) DAFFPL has been promoted by BPCL, IOCL and Delhi International Airport Limited (DIAL) in the year 2009 for implementing Aviation Fuel facility for the new T3 terminal at Delhi International Airport. The paid up share capital of the Company is Rs. 164 crores. BPCL and IOCL each have subscribed to 37% of the share capital of the Company, while the balance is held by DIAL. DAFFPL has posted a revenue of Rs. 110.85 crores and net profit of Rs. 37.55 crores for the Financial Year ending 31st March, 2016 in comparison to the revenue of Rs. 96.04 crores and net profit of Rs. 26.58 respectively in the last year. The Board has recommended a dividend of Rs. 1.80 per share for the Financial Year ending 31st March, 2016 as against Rs. 1.25 per equity share declared in the previous year.

Kannur International Airport Limited (KIAL)

Kannur International Airport Ltd (KIAL) was promoted by the Government of Kerala to establish and operate airports and allied infrastructure facilities at Kannur and other parts of India. KIAL would initially set up an Airport at Kannur in the State of Kerala at an estimated project cost of Rs. 1,892 crores, of which Rs. 1,000 crores will be financed through equity and the balance sum of Rs. 892 crores will be financed by borrowings. The paid up share capital of the Company as at 31.03.2016 is Rs. 864.76 crores.

BPCL has made a contribution of Rs. 170 crores out of the total contribution committed, amounting to Rs. 216.80 crores for 21.68% equity stake in the Company.

GSPL India Transco Limted

BPCL has signed a Joint Venture Agreement in 30th April, 2012 with Gujarat State Petronet Ltd., IOCL and HPCL for laying of 1,747 km for the Mallavaram-Bhopal-Bhilwara- Vijaipur (MBBVPL) gas pipeline. BPCL''s equity contribution to this project will be 11% of the total equity capital. The other Joint Venture (JV) partners will contribute GSPL 52%, IOCL 26% and HPCL 11%. BPCL has made an initial contribution of Rs. 18.15 crores so far. The Company is in the process of acquiring the Right of Way. The Company had reported a miscellaneous income of Rs. 1.30 crores and net profit of Rs. 0.87 crores during the Financial Year 2015-16. The previous year income was Rs. 2.17 crores and net profit was Rs. 1.47 crores.

GSPL India Gasnet Limited

BPCL has signed a Joint Venture Agreement on 30th April, 2012 with Gujarat State Petronet Ltd., IOCL and HPCL for laying of the gas Pipeline Mehsana-Bhatinda (MBPL) (Pipeline length 1654 km) and Bhatinda-Jammu-Srinagar (BJSPL) (Pipeline length 460 kms). BPCL''s equity contribution to this project will be 11% of the total equity capital. The other JV partners will contribute GSPL 52%, IOCL 26% and HPCL 11%. BPCL has made an equity contribution of Rs. 23.32 crores so far. During the Financial Year 2015-16, the Company had reported a miscellaneous income of Rs. 1.74 crores and net profit of Rs. 1.16 crores against the income of Rs. 1.89 crores and profit of Rs. 1.28 crores for the previous year.

Mumbai Aviation Fuel Farm Facility Private Limited (MAFFFPL)

BPCL with IOCL, HPCL and Mumbai International Airport Ltd. (MIAL) entered into a Joint Venture for implementing and managing fuel farm facilities at Mumbai Airport and formed Mumbai Airport Fuel Farm Facility Pvt. Ltd. (MAFFFPL) with equal participation of 25% each. Presently, BPCL has invested an amount of Rs. 38.27 crores towards equity. The Company has started its operations from 1st February, 2015.

MAFFPL recorded a turnover of Rs. 112.12 crores and net profit of Rs. 17.94 crores for the year ending 31.03.2016 in comparison to Rs. 19.77 crores and net loss of Rs. 11.01 crores for the previous Financial Year ending 31st March, 2015.

Kochi Salem Pipeline Private Limited (KSPPL)

BPCL has signed a Joint Venture Agreement with IOCL for implementation of the Kochi-Coimbatore-Salem LPG pipelines project and formed a Joint Venture Company viz., KSPPL in January, 2015 on a 50:50 basis. BPCL''s equity investment in the Company currently stands at Rs. 40 crores.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015 is presented in a separate section forming part of the Annual Report. The forward looking statements made in the Management Discussion and Analysis Report are based on certain assumptions and expectations of future events. The Directors cannot guarantee that these assumptions are accurate or these expectations will materialize.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Sub-Section (3)(m) of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are enclosed as Annexure A to the Directors'' Report.

MEMORANDUM OF UNDERSTANDING WITH MINISTRY OF PETROLEUM & NATURAL GAS

BPCL has been entering into a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas every year since 1990-91. BPCL has also been achieving an "Excellent" performance rating every year since then.

BPCL has won the "MOU Excellence Award'' for the best MoU score in the Petroleum sector in 1998-99, 2000-01, 2002-03 and 2006-07. During 2013-14 and 2014-15 also, BPCL got the highest MoU score in the petroleum sector.

BOARD EVALUATON

As per Ministry of Corporate Affairs Notification dated 5th June, 2015 provisions of Section 134(3)(p) shall not apply in case the Directors are evaluated by the Ministry, which is administratively in charge of the Company as per its own evaluation methodology. Bharat Petroleum Corporation Ltd. being a Government Company, the performance evaluation of the Directors is carried out by the Administrative Ministry (MoP&NG), Government of India, as per applicable Government guidelines.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

As per MCA Notification dated 5th June, 2015, provisions of Section 134(3)(e) are not applicable to a Government Company. Consequently, details on Company''s policy on Directors'' appointment and other matters are not provided under Section 178(3).

Similarly, Section 197 shall not apply to a Government Company. Consequently, disclosure of the ratio of the remuneration of each Director to the median employee''s remuneration and other such details including the statement showing the names and other particulars of every employee of the Company, who if employed throughout/part of the Financial Year, was in receipt of remuneration in excess of the limits set out in the Rules, are not provided in terms of Section 197(12) read with Rule 5(1)/(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Chairman & Managing Director and the Whole-time Directors of the Company did not receive any remuneration or commission from any of its Subsidiaries. BPCL being a Government Company, its Directors are appointed/nominated by the Government of India as per the Government/DPE Guidelines which also include fixation of pay criteria for determining qualifications and other matters.

LISTING AGREEMENT

During the year, SEBI notified SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015 (Listing Regulations) effective December 1, 2015. In terms of the Listing Regulations, all listed entities were required to enter into a new listing agreement with the Stock Exchanges. Accordingly, the Company has executed new listing agreements with BSE Limited and National Stock Exchange of India Limited.

CORPORATE GOVERNANCE

The Report on Corporate Governance, together with the Auditors'' Certificate on compliance of Corporate Governance, is annexed as Annexure D as required under Listing Regulations and Department of Public Enterprises Guidelines of Corporate Governance for Central Public Sector Enterprises.

SOCIAL, ENVIRONMENTAL AND ECONOMIC RESPONSIBILITIES AND BUSINESS RESPONSIBILITY REPORT

We always strive to improve our disclosures regarding our social and environmental per formance and the consequent impact on all our stakeholder groups. The Board of Directors of the Company has adopted and delegated the implementation of Business Responsibility Policy based on the principles of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business as issued by the Ministry of Corporate Affairs, Government of India to the Sustainability Committee. Our Sustainability Report is made in accordance with the Global Reporting Initiative (GRI). As stipulated under the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from the environmental, social and governance perspective is attached as part of the Annual Report.

TRANSACTIONS WITH RELATED PARTIES

The Company, during the Financial Year, entered into contracts or arrangements with related parties, which were in the ordinary course of business and on an arm''s length basis. These transactions are not falling under the provisions of Section 188(1) of the Act. Information on transactions with related parties are provided in Annexure F in Form AOC-2 in accordance with Section 134(3) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014).

In terms of Listing Regulations and Policy of the Company on materiality of related party transactions, transaction entered into with Bharat Oman Refineries Limited, a Joint Venture Company could be considered material. This transaction is being placed for approval of the shareholders.

The Policy on materiality of related party transactions and dealing with related party transactions are available on the Company''s website at the link https://bharatpetroleum.com/images/files/RPTPolicy_ BPCL.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has provided Loans/Guarantees to its Subsidiaries/Joint Ventures and has made Investments in compliance with the provisions of the Companies Act, 2013. The details of such investments made and loans/guarantees provided as on 31st March, 2016, are given in the standalone financial statements under Notes 16, 48 & 49.

RISK MANAGEMENT

The Risk Management Committee of the Board has a defined roles and responsibilities, which includes reviewing and recommending of the risk management plan, and reviewing and recommending the risk management report for approval of the Board with the recommendation by the Audit Committee. The Company''s internal financial controls and risk management systems are assessed by the Audit Committee. The Company 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.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c)/(5) of the Companies Act, 2013, the Directors of the Company confirm that:

a. In the preparation of the Annual Accounts for the year ended 31st March, 2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit and loss of the Company for the year ended on that date;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the annual accounts on a ''going concern'' basis;

e. The Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Smt. Sushma Taishete, Director (D&MC), Ministry of Petroleum & Natural Gas was appointed as Director effective from 19.05.2015 and she has ceased to be Director on Board from 02.01.2016.

Prof J.R.Varma and Shri B. Chakrabarti, Independent Director ceased to be Directors on the Board from 10.08.2015.

Shri Rajesh Kumar Mangal, Shri Deepak Bhojwani and Shri Gopal Chandra Nanda were appointed as Additional Directors with effect from 01.12.2015. As they have been appointed as Additional Directors, they will hold office till the ensuing Annual General Meeting. Notices under Section 160 of the Act have been received proposing their names for appointment as Directors at the ensuing Annual General Meeting.

Dr. Neeraj Mittal, Joint Secretary (Marketing), Directorate General of Hydrocarbons, Ministry of Petroleum & Natural Gas ceased to be a Director on the Board from 11.12.2015.

Shri Anant Kumar Singh, Director, Additional Secretary & Financial Advisor, Ministry of Petroleum & Natural Gas was appointed as Additional Director from 02.01.2016.

As he has been appointed as Additional Director, he will hold office till the ensuing Annual General Meeting. Notice under Section 160 of the Act has been received proposing his name for appointment as Director at the ensuing Annual General Meeting.

Shri K. K. Gupta, Director (Marketing) superannuated at the close of office hours on 29.02.2016.

Shri S. Ramesh was appointed as Additional Director and as Director (Marketing) with effect from 01.03.2016.

As he has been appointed as Additional Director, he will hold office till the ensuing Annual General Meeting.

Notice under Section 160 of the Act has been received proposing his name for appointment as Director at the ensuing Annual General Meeting.

Shri B.K Datta, Director (Refineries) superannuated on 31.07.2016.

Shri R. Ramachandran was appointed as Additional Director and as Director (Refineries) with effect from 01.08.2016. As he has been appointed as Additional Director, he will hold office till the ensuing Annual General Meeting. Notice under Section 160 of the Act has been received proposing his name for appointment as Director at the ensuing Annual General Meeting.

Shri S. P. Gathoo, Director (Human Resources) will retire by rotation at the ensuing Annual General Meeting as per the provisions of Section 152 of the Act, and being eligible, has offered himself for re-appointment as Director at the said Meeting.

The Board has placed on record their appreciation of the Directors who have ceased to be Members of the Board for the valuable contributions made and guidance given for the development and progress of the Company''s business.

As required under the Corporate Governance Clause, brief bio-data of the above Directors who are appointed/ re-appointed at the Annual General Meeting are provided in the AGM Notice.

DECLARATION OF INDEPENDENCE

Independent Directors of the Company have provided declarations confirming that they meet the criteria of independence as prescribed under the Act.

FAMILIARISATION PROGRAMMES

The Company has adopted a policy for the training requirements of Board Members. The details thereof with the programmes sponsored for familiarisation of Independent Directors with the Company are available on the Company''s web link https://bharatpetroleum.com/images/files/FPID_new.pdf

AUDIT COMMITTEE

The details of the composition of the Audit Committee, terms of reference and meetings held are provided in the Corporate Governance Report which forms part of this Report.

VIGIL MECHANISM

The Company has implemented the Whistle Blower Policy to ensure greater transparency in all aspects of the Corporation''s functioning. The objective of the policy is to build and strengthen a culture of transparency and trust in the Corporation and to provide employees with a framework/procedure for responsible and secure reporting of improper activities (whistle blowing) and to protect employees wishing to raise a concern about improper activity/serious irregularities within the Corporation.

The vigil mechanism provides for adequate safeguards against victimisation of persons who use such a mechanism. An employee desirous of making protected disclosures in respect of any of the improper activities may send a communication to the Competent Authority/ Chairperson of the Audit Committee in appropriate or exceptional cases. The Company''s web link given below contains details of the establishment of such a mechanism https://bharatpetroleum.com/About-BPCL/Our-Policies. aspx

NUMBER OF MEETINGS OF THE BOARD

Twelve meetings of the Board of Directors were held during the year, the details of which are given in the Corporate Governance Report that forms part of this Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations.

EXTRACT OF ANNUAL RETURN

As required under Section 92(3) of the Act, the extract of Annual Return of the Company is annexed herewith in specified Form MGT-9 as Annexure G to this Report.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The details are included in the Management, Discussion & Analysis Report which forms part of this Report.

STATUTORY AUDITORS

M/s. CNK & Associates LLP, Chartered Accountants, Mumbai and M/s. Haribhakti & Co. LLP, Chartered Accountants, Mumbai, were appointed as Statutory Auditors for the year 2015-16 by the Comptroller & Auditor General of India (C&AG), under the provisions of Section 139(5) of the Companies Act, 2013. The said firms have been appointed as the Statutory Auditors also for the Financial Year 2016-17 by the C&AG. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

COST AUDITORS

During the year 2015-16, the Cost Audit Report has been filed with the Ministry of Corporate Affairs on 05.10.2015. The due date for filing the Cost Audit Report was 08.10.2015. This Cost Audit Report pertains to the year 2014-15 and the Cost Auditors were M/s. Rohit & Associates, Mumbai and M/s. Musib & Company, Mumbai.

The same Cost Auditors have been appointed for the Financial Year 2015-16. The Cost Auditor, shall within a period of 180 days from the closure of the Financial Year, forward the Cost Audit Report and the Company is required to file the Cost Audit Report within 30 days of receipt of the same. M/s. Rohit & Associates, Cost Accountants, were nominated as the Company''s Lead Cost Auditor.

SECRETARIAL AUDITOR

The Board has appointed M/s Ragini Chokshi & Company, Company Secretaries to conduct Secretarial Audit for the Financial Year 2015-16. The Secretarial Audit Report for the Financial Year ended 31st March, 2016 is annexed herewith in Annexure H to this Report. The Secretarial Audit Report does contain an observation that "The Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards mentioned therein except for non-compliance under 49(II)(A)(1)/(2) of the erstwhile equity Listing Agreement/Regulations 17(1)(a)/(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and further in terms of Clause 2.2 and 3.1.4 of the Guidelines issued by DPE relating to the condition of having at least one Woman Director as on 31st March, 2016 and half of the Board of Directors shall comprise of Independent Directors and consequently the Committee constitution requirement not met with during the period when Independent Directors were not on the Board."

Explanations by the Board to the above observation in the Secretarial Auditor Report:

Bharat Petroleum Corporation Ltd. is a Government Company under the Administrative Control of Ministry of Petroleum and Natural Gas. The Government of India makes nomination/appointment of all categories of Directors in accordance with the laid down Department of Public Enterprises Guidelines. The subject matter of nomination/appointment of adequate number of Independent Directors including Woman Director falls under the purview of the Government of India. We have taken up the matter with the Ministry of Petroleum & Natural Gas and necessary actions are being initiated to fulfill the requirements and nominations for adequate number of Independent Directors. It may be noted that the Company was having a Woman Director from 19.05.2015 till 01.01.2016.

GENERAL

There were no significant or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future. The Company has not issued equity shares with differential rights/sweat equity shares/Employee Stock Options. During the year under review, there was one complaint of sexual harassment from an employee of a Contractor, which is currently under investigation by the Internal Complaints Committee.

ACKNOWLEDGEMENTS

The Directors thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. BPCL''s consistent growth has been possible only due to their hard work, solidarity, cooperation and support. We thank the Government of India, Government of Maharashtra, Government of Kerala and all State Governments, other Government agencies and Ministry of Petroleum & Natural Gas for their guidance and support, and look forward to their continued participation in BPCL''s growth.

For and on behalf of the Board of Directors

Sd/-

Place : Mumbai S. Varadarajan

Date : 11th August, 2016 Chairman & Managing Director


Mar 31, 2014

Dear Members,

On behalf of the Board of Directors, I take pleasure in presenting the Annual Report on the performance of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31st March, 2014.

PERFORMANCE OVERVIEW

Group Performance

During the year 2013-14, the aggregate Refinery throughput at BPCL''s Refineries at Mumbai and Kochi, along with its subsidiary company, Numaligarh Refinery Limited (NRL) and considering 50% throughput of Joint Venture Company, Bharat Oman Refineries Limited (BORL) was 28.69 Million Metric Tonnes (MMT) in comparison to 28.55 MMT in 2012-13. The BPCL Group ended the year with market sales of 34.31 MMT as against 33.67 MMT in the previous year. The group''s exports of petroleum products during the year stood at 3.06 MMT as compared 3.22 MMT in 2012-13.

In the financial year, the group achieved a Gross Revenue from Operations of Rs. 2,76,005.09 crores as compared to Rs. 2,53,285.57 crores recorded in 2012-13. The Profit after Tax was at Rs. 4,052.98 crores in 2013-14 as against Rs. 1,936.15 crores in the previous year. After setting off the minority interest, the Group earnings per share increased to Rs. 54.08 in the current year from Rs. 26.01 in 2012-13.

CONSOLIDATED GROUP RESULTS

2013-14 2012-13

Physical Performance

Crude Throughput (MMT) 28.69 28.55

Market Sales (MMT) 34.31 33.67

Financial Performance '' Crores

Gross Revenue from Operations 2,76,005.09 2,53,285.57

Less: Excise Duty Paid (11,598.49) (11,104.59)

Net Revenue from Operations 2,64,406.60 2,42,180.98

Gross Profit 10,758.74 8,201.25

Finance Cost 1,982.14 2,518.29

Depreciation & amortization expense 2,610.92 2,462.70

Profit before tax 6,165.68 3,220.26

Provision for taxation - Current (Net of MAT Credit Entitlement) 2,554.43 1,398.88

Profit after Current Tax 3,611.25 1,821.38

Provision for taxation - Deferred (Asset )/Liability (355.31) (72.65)

Short /(Excess) provision for Taxation in earlier years provided for (86.42) (42.12)

Net Profit 4,052.98 1,936.15

Minority Interest 142.30 55.32

Net Income of the group attributable to BPCL 3,910.68 1880.83

Group Earnings per share attributable to BPCL") 54.08 26.01

COMPANY RESULTS

2013-14 2012-13 Physical Performance

Crude Throughput (MMT) 23.35 23.21

Market Sales (MMT) 34.00 33.30

Rs. Crores

Financial Performance

Gross Revenue from Operations 2,71,037.35 2,50,649.26

Gross Profit 9,554.88 7,787.03

Finance Cost 1,359.08 1,825.24

Depreciation & amortization expense 2,246.82 1,926.10

Profit before tax 5,948.98 4,035.69

Provision for Taxation - Current (Net of MAT Credit Entitlement) 2,275.00 1,173.29

Provision for Taxation - Deferred (294.82) 255.16

Short/(Excess) provision for taxation in earlier years provided for (92.08) (35.66)

Net Profit 4,060.88 2,642.90

Balance brought forward 500.00 500.00

Amount available for disposal 4,560.88 3,142.90

The Directors propose to appropriate this amount as under:

Towards Dividend:

Final (proposed) Dividend 1,229.24 795.39

Corporate Dividend Tax 196.58 127.47

For transfer to Debenture Redemption Reserve 196.84 -

For transfer to General Reserve 2,438.22 1,720.04

Balance carried to Balance Sheet 500.00 500.00

Summarized Cash Flow Statement :

Cash Flows:

Inflow/(Outflow) from operations 8,404.10 5,480.45

Inflow/(Outflow) from investing activities (4,285.89) (2,387.16)

Inflow/(Outflow) from financing activities (6,243.73) (1,743.25)

Net increase/(decrease) in cash & cash equivalents (2,125.52) 1,350.04

Company Performance

During 2013-14, BPCL recorded a Revenue from operations of Rs. 2,71,037.35 crores, thus registering an increase of 8.13% over the previous year''s revenues of Rs. 2,50,649.26 crores. The profit before tax for the year 2013-14 stood at Rs. 5,948.98 crores as compared to Rs. 4,035.69 crores in 2012-13. After providing for tax, (including deferred tax) of Rs. 1,888.10 crores as against Rs. 1,392.79 crores during the last year, the profit after tax for the year was certified at Rs. 4,060.88 crores as against Rs. 2,642.90 crores reported in 2012-13. This has been an unprecedented performance by BPCL.

In 2013-14, the earnings per share amounted to Rs. 56.16 as compared to Rs. 36.55 in 2012-13. Internal cash generation during the year increased by 15% and stood at Rs. 4,585.64 crores as against Rs. 4,001.68 crores in 2012-13.

There was an increase in the amount of taxes and duties contributed to the exchequer by BPCL to Rs. 43,602.22 crores from Rs. 38,028.20 crores in the previous financial year.

As on 31st March, 2014, the net worth of BPCL was computed as Rs. 19,458.76 crores, as compared to Rs. 16,634.02 crores as at the end of the previous year.

Dividend

A dividend of 170% has been recommended by the Board of Directors (Rs. 17 per share) for the 2013-14, on the paid- up share capital of Rs. 723.08 crores. The dividend of Rs. 1,425.82 crores (including Rs. 196.58 crores for Corporate Dividend Tax) will be disbursed from the amount of profit after tax.

Borrowings

In March 2014, the Company has issued 3% Bonds 2014 - 2019 for CHF 200 Million. The Net Proceeds of this Bond Issue were used for working capital purposes. The Bonds are listed on the SIX Swiss Exchange.

There has been a 26% reduction in the amount of borrowings from banks as at year end to Rs. 13,843.68 crores from Rs. 18,774.07 crores as at 31st March, 2013. The loans from

Oil Industry Development Board have also recorded a decrease to Rs. 321.25 crores as at 31st March, 2014 as compared to Rs. 593.50 crores at the end of the previous year. Debentures worth Rs. 700 crores issued during the year 2012-13 remained outstanding as on 31st March 2014. The Collateralized Borrowing and Lending Obligation (CBLO) through Clearing Corporation of India Limited amounted to Rs. 1,101.25 Crores as at 31st March, 2014. 4.625% US Dollar International bonds issued during 2012-13 of USD 500 Million (equivalent to Rs. 3,004.99 crores) remained outstanding as on 31st March 2014. No Commercial Papers remained outstanding as on 31st March 2014, as compared to Rs. 430.00 crores as on 31st March 2013. 3% Swiss Franc International Bonds issued during 2013-14 of CHF 200 Million (equivalent to Rs. 1,350.39 crores) remained outstanding as on 31st March 2014.

The amount of deposits, matured but unclaimed, at the end of the year was Rs. 0.14 crores. This pertains to 34 depositors.

Capital Expenditure

The total amount of Capital Expenditure incurred during the year 2013-14 was Rs. 5,560.39 crores as compared to Rs. 3,544.40 crores during the year 2012-13.

C&AG Audit

The Comptroller and Auditor General of India (C&AG) has no comment upon or supplement to the Statutory Auditors'' Report on the Accounts for the year ended 31st March 2014. The letter from C&AG is annexed as Annexure E.

REFINERIES

MUMBAI REFINERY

The Corporation''s refineries achieved excellent performance during 2013-14 consistently registering an overall capacity utilisation of over 100%. During the period under review, Mumbai Refinery achieved throughput of 13.03 MMT of feedstock (crude oil and other feedstock) as against 13.10 MMT achieved in 2012-13. Despite having planned shutdown of two crude processing units, Mumbai Refinery achieved this level of throughput representing a capacity utilization of 108.6% almost similar to previous year utilization levels.

During the period under review, Mumbai refinery achieved its highest ever production of 83 TMT of Propylene (C3), 1437 TMT of Motor Spirit (MS) and Methyl Tertiary Butyl Ether (MTBE), 5577 TMT of High Speed Diesel (HSD), and 239 TMT of Lube Base oils. Mumbai Refinery has again demonstrated its ability to meet the demand for MS & HSD complying with Euro IV quality norms.

The Gross Refining Margin (GRM) for the year stood at USD 3.95 per barrel as compared to USD 4.67 per barrel realized in 2012-13. The overall gross margin for the refinery in 2013-14 amounted to Rs. 2,340 crores as compared to Rs. 2499 crores in 2012-13. The lower GRM in Mumbai Refinery for the year 2013-14 can be attributed to lower product cracks.

KOCHI REFINERY

Kochi Refinery, for the second year in succession, achieved a throughput crossing the 10 MMT mark by clocking 10.32 MMT in 2013-14 as compared to 10.10 MMT in 2012-13.The capacity utilization of the refinery during the year was 108.6% as against 106.3% in the previous year. During the year, Kochi Refinery achieved its highest ever production of 514 TMT LPG, 1529 TMT of MS, 466 TMT of ATF and 4761 TMT of HSD.

The GRM for the year 2013-14 amounted to Rs. 2,249 crores (USD 4.80 per barrel @ average USD / INR exchange rate Rs. 60.50) as compared to the GRM of Rs. 2,211 crores (USD 5.36 per barrel @ average USD / INR exchange rate Rs. 54.45) for the year 2012-13.

The details of the performance of the Refineries, their activities and future plans are discussed in the Management Discussion and Analysis Report (MD&A).

MERGER OF KRL WITH BPCL

As informed in the last year''s Report, merger of the erstwhile Kochi Refineries Limited (KRL) with BPCL under Sections 391 to 394 of the Companies Act 1956 had been completed, following receipt of the Order dated 18th August 2006 issued by the Ministry of Company Affairs, New Delhi. One of the Shareholders of the erstwhile KRL had filed a Writ Petition in the Delhi High Court challenging the merger. The Court had vide its order dated 3rd October, 2013 dismissed the writ petitions and pending applications in default and on account of non-prosecution.

MARKETING

During the year 2013-14, BPCL''s market sales volume touched a level of 34.00 MMT as compared to 33.30 MMT in the previous year. This represented a growth rate of 2.10% over the previous year. BPCL''s market share amongst the public sector oil companies stood at 23.48% as at 31st March, 2014, as compared to 23.14 % as at the end of the previous year.

A detailed discussion of the performance of the Marketing function is given in the MD&A.

PROJECTS

Integrated Refinery Expansion Project (IREP) at Kochi

The project envisages capacity expansion of Kochi Refinery from 9.5 Million Metric Tonnes Per Annum (MMTPA) to 15.5 MMTPA and modernisation of processing facilities to produce auto-fuels conforming to Euro-IV/ V specifications. It also envisages refinery residue stream upgradation to value added products.

The project involves a capital outlay of Rs. 16,504 crores and is expected to be completed in May 2016. The project has achieved an overall physical progress of 47.67 % with cumulative expenditure of Rs. 2,563.75 crores as on 30th June 2014.

All the major statutory clearances have been obtained. Jobs relating to HAZOP review of major process units and offsites, 3D model reviews of facilities and site grading and piling of major units have been completed. Civil, structural and underground piping jobs of units and offsites are in progress. Foundations of major equipment and structures are progressing at site. The ordering of major packages and long lead items has been completed. Contracts for all packages, composite mechanical jobs for units and offsites have been awarded.

A work force of more than 6000 labourers has been engaged at site on a daily basis. The IREP site has completed 17.6 million lost time accident (LTA) free man-hours as on 31st July, 2014. Planting of saplings has commenced to develop a green belt of 20,000 trees around the project site. Liquid effluent from all the units of IREP will be converted to De-mineralized water by employing state-of-the-art technology and will be used in boilers. The Government of Kerala continues to provide proactive support to the project including financial incentives. The IREP site has also been declared as a strike-free zone.

Capacity Augmentation of Kota-Piyala Section of MMBPL Pipeline

The capacity augmentation project of the Kota-Piyala section of the Mumbai-Manmad-Manglia-Piyala–Bijwasan pipeline from 2.8 MMTPA to 4.4 MMTPA, to evacuate products from Bina Refinery and also to meet the growing demand for petroleum products in the Northern region has been completed in June 2013. The approved project cost is Rs. 152.89 crores and the cumulative expenditure on the project was Rs. 135.80 as on 30th June 2014.

Kota Jobner Pipeline Project

To economize transportation of MS/SKO/HSD from BPCL''s Mumbai refinery as well as BORL''s refinery at Bina, the project of laying a 210 km long and 14" (35.6 cms) dia. cross-country pipeline from Kota to Jobner (near Jaipur) was envisaged. The estimated cost of the project is Rs. 276.27 crores.

Petroleum and Natural Gas Regulatory Board (PNGRB) authorization for laying the pipeline has been received. The project has achieved an overall physical progress of 74.5% with cumulative expenditure of Rs. 139.50 crores as on 30th June, 2014. The project is anticipated to be complete by March 2015.

Continuous Catalytic Regeneration Reformer (CCR) Facilities and Hydrocracker Revamp at Mumbai Refinery

The project has been undertaken to increase the production of Euro IV grade MS and HSD at Mumbai Refinery. This involves revamping of the Hydrocracker Unit to increase its capacity from 1.75 MMTPA to 2.0 MMTPA and setting up of new Continuous Catalytic Regeneration Reformer Unit (CCR) of 1.2 MMTPA capacity with matching new Naphtha Hydro Treater Unit (NHT) and new Pressure Swing Absorber (PSA) Units and other utilities/offsite facilities at an approved cost of Rs. 1827 crores.

NHT and CCR units along with offsite facilities were mechanically completed on 10th December, 2013. NHT was commissioned on 13th February, 2014 and CCR was commissioned on 4th March, 2014 with a cumulative expenditure of Rs. 1,596.54 crores as on 30th June, 2014.

Replacement of CDU /VDU at Mumbai Refinery

The project envisaged installation of a new state-of-the-art integrated Crude & Vacuum Distillation unit (CDU-4) of 6 MMTPA capacity to improve mechanical integrity and enhance safety & environment in place of the existing old standalone Crude and Vacuum Units.

The project approved cost is Rs. 1419 crores and Engineers India Limited (EIL) has been appointed as Engineering, Procurement, Construction & Management Consultant (EPCM) for the project. ''Petroleum and Explosive Safety Organization'' (PESO), Environment clearance and ''Directorate of Industrial Safety and Health'' (DISH) approvals have been obtained for the project. The project has achieved overall physical progress of 77.63% and cumulative expenditure of Rs. 599.48 crores as on 30th June 2014. Civil and structural work is in progress and the main Crude and Vacuum column has been erected at site. CDU/ VDU heater, cooling tower construction, equipment erection and piping works are in progress. The mechanical completion of the project is scheduled in March 2015.

Pipeline for Transfer of LPG from BPCR / HPCR Mumbai to Uran

The project envisages laying a 28 km pipeline (12 km offshore and 16 km onshore) and provision of 3 x 900 MT Mounded Storage Vessels (MSVs) at BPCL''s Uran LPG Plant. The pipeline is being laid to transfer LPG from BPCL''s Mumbai refinery and the Mumbai refinery of Hindustan Petroleum Corporation Limited (HPCL). This would significantly reduce the road movement of product being currently undertaken by both BPCL & HPCL from their refineries at Chembur, Mumbai. The pipeline portion of the project costing Rs. 229.59 crores will be shared equally with HPCL. The MSVs are expected to cost around Rs. 47.24 crores and will be on BPCL''s account.

The entire length of pipeline laying has been completed. The project has achieved an overall physical progress of 98.8% with cumulative expenditure of Rs. 257.90 crore as on 30th June 2014. Pre-commissioning activities are in progress.

RESEARCH & DEVELOPMENT (R&D)

The Research and Development Centres of BPCL are consistently following the global trends of technology innovations for energizing lives. The R&D Centres are actively involved in supporting the businesses through constant advanced technical support and novel product / process technology development in niche areas leading to new business development. The core research areas are broadly divided into four categories, namely Refinery processes upgradation / optimization, development of novel energy efficient technologies, product development and alternative fuels and energy. R&D capabilities at the Corporate R&D Centre, Greater Noida, Uttar Pradesh, Product & Application Development Centre, Sewree, Mumbai and the R&D Centre at Kochi Refinery are being leveraged towards business growth of the Company and achieving the corporate vision. BPCL''s R&D programmes have been discussed separately in the MD&A. Further, the areas covered under R&D and the benefits derived from R&D activities are detailed in Form B of Annexure A to the Directors'' Report.

NON-CONVENTIONAL ENERGY INITIATIVES

BPCL''s endeavours of reducing the carbon footprint and protecting the environment continued during the year. The Corporation reinforced its footprint in the renewable energy front by installing 5 MW capacity windmills in the hilly range of Kappatguda in Chitradurga District, Karnataka. The windmills are currently in operation and power produced is sold to Karnataka State Electricity grid. This project has qualified for Clean Development Mechanism (CDM) benefit. We are currently evaluating setting up more windmills in Gujarat, Maharashtra, Madhya Pradesh and Tamil Nadu depending on availability of land and other commercial considerations.

BPCL is evaluating a proposal to set up a grid connected Solar Farm of about 5 MW capacity, either on its own or through a Joint Venture, at various select locations, for which feasibility is being carried out.

INDUSTRIAL RELATIONS

The overall Industrial Relations climate remained peaceful and cordial throughout the year. Long Term Settlements on Wages & Other Matters and Promotion Policy have been successfully signed with Marketing Unions in January 2014. Long Term Settlements on Wages & Other Matters with Kochi Refinery and Mumbai Refinery Unions were signed on 30th May 2013 and 31st May 2013 respectively.

FULFILLMENT OF SOCIAL OBLIGATIONS

The true spirit of Corporate Social Responsibility has long since been ingrained in the DNA of BPCL. Our core thrust areas for projects are first Education and Water Conservation, closely followed by Skill Development, Health and Community Development. BPCL achieved its MOU targets for the year 2013-14, which included reaching out to 75,000 children for imparting quality education, 30 villages for Water Conservation through Rainwater Harvesting and 750 beneficiaries for income generation through skill development programs. For Project BOOND, BPCL was recently conferred with World Petroleum Council''s "Excellence Award for Social Responsibility" amongst more than 100 nominations under this category, from across the world.

Project Computer Assisted Learning (CAL) was started in 2009-10 with 11 Zilla Parishad schools in Uran with the NGO, Pratham Infotech Foundation. This was scaled up to over a hundred schools in Mumbai, Uran, Panvel (Maharashtra) and Lucknow (UP). Around 90% of the schools in Uran block are digitally enabled. The Digital Literacy and Life Skills Project, also in partnership with Pratham Infotech Foundation, completed its third and final year across 40 low income/ BMC schools in Mumbai, reaching out to 22,200 children. The one-of-a-kind Science Education Programme, in collaboration with the NGO, ''Agastya International Foundation'' for children of Government schools near the Solur LPG Plant in Bangalore has been extended to make hands-on science education available among poor rural children and teachers. In addition to the Science Centre hub, mobile science lab and lab-in-a-box activities, BPCL introduced a new "Young Instructor Leader" program. This program is focused at democratizing leadership development and unlocking human potential through the ''students-teach students'' model. The Teacher Training module too has been started for addressing teacher absenteeism, rote based & uninspiring education and lack of interaction between teachers and the student. So far, we have reached out to over 23,100 children in the last year.

Our Read India project for impacting learning levels of children, has been scaled up to cover 13 blocks and also includes upper primary students in 6 blocks, where focus was on comprehension and application based abilities. We have continued with learning camps for children from the primary level in all 13 blocks. In a third party assessment carried out of the project, it was highlighted that overall learning levels, both of factual knowledge and comprehension, were higher in students who had been a part of the intervention program (learning camps). Around 23,800 children from both, primary and upper primary classes, were a part of our learning camps and benefitted in the last year. Along similar lines, through our project for education of tribal students in Mayurbhanj and Sundergarh districts of Odisha, 4453 children now have access to school education.

This year, we have completed our unique in-house pilot project for professional development of primary teachers & principals from low income schools. Further, we took up a new library project aimed at impacting literacy and reading skills and therefore, increasing creative thinking and supplementing learning on the whole. In order to provide children with access to not only books to read, but also teach them how to manage the entire library, we set up 20 libraries in Mumbai and Delhi where over 3800 children are benefitted.

Project Bala Janaagraha is aimed at instilling good citizenry in children as the key to building good and vibrant nations. This unique civic education project targeted creating responsible and proactive citizens through conducting civic sessions in schools which gave 2247 children know-how about their rights and duties. A Mini Civic fest, City level Civic fest and National Civic fest were held in which the children participated in nationwide competitions.

Through training in the art of chikankari embroidery, 500 women now have steady incomes and are financially independent. Similarly, after training in zardosi & aari work about 200 women in Loni earn and save enough to send their children to school.

A project in Patna named Livelihood Advancement Business School (LABS) consisted of placement linked training of 88 unemployed youth who are now employed in security services, hospitality, ITES, customer relations, sales and housekeeping. We recently began a LABS project for Persons with Disabilities in Mumbai and Noida. The 38 youth who were trained were then placed and tracked for up to 3 months post placement to ensure job retention. Along similar lines in Kolkata, we trained 80 disabled youth from economically backward families in Desktop Publishing. 150 rural youth have been trained in skills like agro equipment repairing, nursery development, vermicomposting and mechanics in Nagpur and Wardha near our business units.

Our water project Rs.Boond'' has covered 41 villages this year from Tamil Nadu and Karnataka. Boond now spans across India in Tamil Nadu, Andhra Pradesh, Rajasthan, Maharashtra, Karnataka and Uttar Pradesh. The community that is benefitted by the water-structures built or repaired, plays an active role in building and maintaining the structure that contributes to their daily needs. Over 6100 families have been benefited and over 600 hectares of land are under irrigation ensuring steady water supply for Kharif crops. This project also supports sustainable employment through agriculture, fish culture, cattle rearing and drinking water made available through special biosand filters.

BPCL initiated a pilot project in one of our retail outlets in Padgha where truckers who drive in to fuel can stop and get their eyes checked for free at a fully equipped vision centre. Furthermore, villagers from the nearby community too are served through this vision centre. Over 1000 persons have been tested for free and 25% were dispensed spectacles as well.

With an objective to improve and encourage institutional care and safe delivery of babies under supervised medical attention, we work with Community Health Volunteers (CHV) called Aarogya Mitra in Vikramgad taluka in rural Maharashtra. These CHVs try to achieve enrolment of tribal women in antenatal care and encourage institutional deliveries. They also provide health services to mother and child through homeopathy and create awareness about the importance of healthcare. Through these 35 CHVs, we cover 150 tribal hamlets belonging to 25 villages with a total population of 50,628 people.

Similarly in HD Kote taluka, Mysore District of Karnataka we support reproductive and child healthcare of the tribals. Over 60,000 villagers from 56 tribal colonies are being benefitted from this project, where there has been a steady increase in institutional deliveries, linkage to Government healthcare schemes as well as essential ID documents like Aadhar card, increase in awareness in the community about immunization, nutrition, infant mortality etc. through regular meetings.

PROMOTION OF SPORTS

BPCL sportspersons continued to excel in the national and international sports arena in various disciplines.

Our young star performer for the year, P. V. Sindhu excelled by winning a Bronze Medal in the Women''s Singles Badminton competition at the 2014 Commonwealth Games held at Glasgow, Scotland. Saina Nehwal continued to shine with some creditable wins during the year. She won the coveted Women''s Singles of 2014 Australian Super Series Badminton title, and improved her ranking to World No.7, climbing two spots. Chess wizards P. Harikrishna, Parimarjan Negi and Abhijit Gupta had an outstanding year winning many international events. Abhijit Gupta was also conferred with the prestigious Arjuna Award along with P. V. Sindhu this year. Our ace Archer Atanu Das has been a constant member of the Indian Archery team and has won medals in various International events. In Billiards, Devendra Joshi once again clinched the Bronze Medal in the World Billiards Championships, thereby taking his overall tally to 10 medals in World Championships. Our Kabaddi and Volleyball teams performed exceedingly well in most of the prestigious tournaments they participated in. In Cricket, Pragyan Ojha performed creditably while representing the Indian Cricket team.

BPCL continues to contribute to the national contingents by way of adding players to the national teams e.g. Pragyan Ojha in Cricket; Birendra Lakra & Manpreet Singh in Hockey; Poulomi Ghatak, Soumyajit Ghosh, Sanil Shetty, Neha Aggrawal in Table Tennis; R.M.V. Guru Saidutt, Saina Nehwal, Jwala Gutta & P.V. Sindhu in Badminton; Devendra Joshi & Manan Chandra in Billiards & Snooker; Harikrishna, Parimarjan Negi, Abhijeet Gupta, G.N. Gopal and M.R. Venkatesh in Chess and Marianne Karmarkar in Bridge. In the Physically Challenged Category, Joby Mathew won several Gold/ Silver medals in the World Arm Wrestling Championship.

Our endeavours continue in the various avenues of Sports development through varied support mechanisms extended to our players for excelling in sports in India and abroad, such as coaching, skill development, orientation programmes, performance feedback etc.

RESERVATION AND OTHER WELFARE MEASURES FOR SCHEDULED CASTES/SCHEDULED TRIBES/ OTHER BACKWARD CLASSES AND PERSONS WITH DISABILITIES

BPCL has been following in letter and spirit, the Presidential Directives and other guidelines issued from time to time by Ministry of Petroleum & Natural Gas, Ministry of Social Justice and Empowerment and the Department of Public Enterprises relating to reservations / concessions for Scheduled Castes / Scheduled Tribes / Other Backward Classes.

An adequate monitoring mechanism has been put in place for sustained and effective compliance uniformly across the Corporation. Rosters are maintained as per the Directives and are regularly inspected by the Liaison Officer of the Corporation as well as the Liaison Officer of Ministry of Petroleum & Natural Gas to ensure proper compliance of the Directives.

SC/ST and economically backward students are encouraged by awarding scholarships to students pursuing courses at Industrial Training Institutes & Secondary School education up to graduation level.

BPCL also complies with provisions under "The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation), Act 1995 relating to providing employment opportunities for Persons with Disabilities (PWDs).

Details relating to representation/appointment of SC/ST/ OBC candidates and Persons with Disabilities are enclosed as Annexure D.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Official Language Implementation Committees continued to function at the Corporate, Regional, Refinery, Area Level and at major location levels, to take decisions based on the annual programme issued by Ministry of Home Affairs, besides the provisions of the Official Language Act and Rules. These Committees perform the task of reviewing the progress made in Official Language (OL) implementation on a quarterly basis.

The First Sub-Committee of the Parliamentary Committee on Official Language inspected the offices situated at various locations. Officials from the OL Department, Ministry of Petroleum & Natural Gas also visited some locations and the Rajbhasha Vibhag of Ministry of Home Affairs inspected nine locations on an all India basis. All committees expressed their appreciation for the efforts taken by BPCL for promotion of Hindi.

Hindi fortnight was celebrated at all major locations in September, 2013 with various Hindi competitions being organized. As per the directives from MOP&NG, a certificate was given to staff who had done an excellent job in Hindi Implementation from all Regions/Refineries as Rajbhasha Gourav Puraskar. Similarly, World Hindi Day was organized on 10th January, 2014 at all Regions and Refineries.

User friendly Hindi Unicode supported Software Indic Language was loaded at all BPCL Offices. A web page was created for help online for training of Hindi ISM V6 software/ Indic Language Software.

BPCL received the Third prize among 60 PSUs in Mumbai for Best Official Language implementation during 2013-14 and also for its presentation from Mumbai Town Official Language Implementation Committee (TOLIC). Our Eastern Region Hindi Cell bagged the Second prize for Best Implementation of Hindi from TOLIC Kolkata. BPCL was awarded the Third prize from Aashirwad for Best Implementation of Hindi under Western Region. Our C&MD issued annual check points under the Annual Programme of OL implementation for the year 2013-14. Our 15 offices have been notified under sub-rule 10(4) of OL Rules, 1976 during the year on an All India basis. All the heads of Hindi Cell participated in the First Petroleum Rajbhasha Conference organized by MOP&NG at Kochi on 14th/15th February, 2014.

CITIZENS'' CHARTER AND GRIEVANCE REDRESSAL

BPCL has published the Citizens'' Charter on its Corporate website, which provides an overview of the marketing activities of the Corporation, policy guidelines and processes on marketing of petroleum products. The idea behind the Citizens'' Charter is to enhance customer experience through qualitative improvements in services across the spectrum of the Corporation''s businesses. The Charter covers the mandate of the Corporation, the customer''s rights with respect to standards, quality, time-frame for service delivery, touch points, the grievance redressal mechanism etc. It also contains the guidelines for selection of Dealers & Distributors to ensure transparency in the process and help educate and communicate with all stakeholders. The charter is updated periodically for changes in policy guidelines and the marketing environment.

BPCL has a well established Grievance Redressal Mechanism in place at numerous customer touch points. The State Coordinators in various States and Union Territories and the Territory Managers of Retail & LPG businesses act as Nodal Officers for redressal of customer grievances. The Retail & LPG businesses have dedicated toll-free helpline numbers for registration and redressal of customer complaints. In addition, an internet based Grievance Redressal Mechanism (Centralized Public Grievance Redressal & Monitoring System) of Government of India helps BPCL in speedy redressal of public grievances.

The Right to Information (RTI) Act 2005 has been implemented in BPCL since its inception. BPCL today has a decentralized structure for RTI requests with 88 Central Public Information Officers (CPIOs) and 11 Appellate Authority (AAs), which helped the Corporation in ensuring faster response to information seekers within the stipulated time-frame. Through continuous learning programmes and workshops for CPIOs / AAs, officials across the organization have been familiarized and sensitized with every aspect of the Act. During the period ending 31st March 2014, BPCL provided requisite information to 3590 RTI requests.

MICRO & SMALL ENTERPRISES

In line with Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012 effective from 1st April 2012, BPCL has taken action in promoting procurement of Goods and Services from MSEs. Accordingly, a ''Purchase Preference Clause'' for MSE vendors was introduced in standard ''General Purchase Conditions'' for all tenders and a Nodal Officer for implementation of the MSE policy was appointed. Action has been taken for identification of MSE vendors including SC/ST MSE vendors from the existing vendor base and details are being updated.

The BPCL procurement process which facilitates MSE participation is mainly through ''Press tender'' and BPCL tenders are published in the Central Public Procurement Portal belonging to NIC, Government of India, BPCL corporate website and BPCL e-procurement site. Workshops were conducted with vendors highlighting BPCL''s approach and to encourage procurement of goods and services from MSEs. BPCL also participated in the ''National Vendor Development Programme 2013'' organized by Ministry of Micro, Small and Medium Enterprises, wherein BPCL presented its procurement strategy and vendor registration procedure for MSEs. Expression of Interest was floated inviting MSE vendors for registration with BPCL. During the process, Pre-bid meetings were conducted exclusively for prospective MSE vendors at Mumbai, Noida, Kolkata and Chennai.

As per the Public Procurement Policy for MSEs order, 2012, 20% procurement through the MSEs has to be achieved by March 2015. However, in the year 2013-14 itself, BPCL has achieved 24.08 % procurement through MSEs. For 2013- 14, the actual MSE procurement value is Rs. 1,899.37 crores vis-a-vis total procurement value of Rs. 7,888.56 crores .

VIGILANCE

Vigilance in BPCL ensures activities to maintain the highest level of ethical standards in the Organization. A key component of the overall Corporate Governance structure in BPCL, the Vigilance team continues to focus on proactive and preventive measures to promote good governance, maintaining ethical standards in conducting the business across the organization.

Vigilance works with Business in identifying vulnerable areas in existing procedures and processes like Bill Payment, Dealer/Distributor Selection, Re -constitution of Dealership/Distributorship etc. The Information System infrastructure has been leveraged to put in place practices like e-tendering, e-payments, e-receipts etc., which raises confidence amongst the vendor, contractor fraternity in terms of transparency and good governance.

This year, Corporate Vigilance introduced a wide range of awareness initiatives like "Vendor Meets" which were conducted to get inputs from important vendors. With the purpose of continuously upgrading business knowledge through the learning process to identify vulnerable area, CVO has initiated meetings with different business groups at the working level & policy formulation level.

The objectives of the meetings with SBUs & Major Entities like Retail, LPG, Quality Control Cell, Lubricants, Audit, I&C etc., were focused to have better coordination & expedite the disciplinary cases which were appreciated.

Workshops and Seminars were conducted enabling the concerned officers to have a thorough understanding of guidelines and procedures. These workshops were conducted with the teams in the Refineries, Retail, LPG, Engineering & Projects and Finance. Vigilance Officers during visits to various Company locations provide guidance and clarifications to officers on operational aspects of circulars and guidelines issued by the Central Vigilance Commission (CVC) and the Ministry.

BPCL has embarked to bring out robust procurement and contract guidelines covering various aspects such as purchase management, tendering, bidding, bid evaluation, general and special purchase conditions, post award execution, financial rules, taxes, duties, e-procurement etc. To take forward this initiative, a multifunctional task force has been set up to ensure that principles of integrity, transparency and fair play are the cornerstones of public procurement. This will take BPCL further in terms of effectiveness, efficiency and of course value for money.

To increase transparency in interface with vendors, contractors, suppliers and service providers, tenders are being posted on Central Public Procurement (CPP) portal of the Government of India website. Integrity Pact has been adopted and is mandatory for all tenders having a contract value of more than Rs.1 crore.

Surprise Inspections were conducted at select Company locations, Retail Outlets, LPG Distributorships etc. Inspections of major projects/works/procurement were also undertaken and observations with specific recommendations were conveyed to concerned departments. Detailed studies were carried out on key systems in the Organization and findings were shared with the role holders with a view to initiate remedial action.

Corporate Vigilance also conducted detailed investigation into the Complaints and Source Information. Complaints including online complaints were received and were investigated directly by the Vigilance function and through the Businesses / Entities. In matters referred by CVC and MOP & NG, necessary investigations were carried out and recommendations were given within the prescribed time frame.

A web based "Vigilance Complaint Handling System" has been rolled out in the Organization. It is a web based workflow application, that has enabled the Vigilance Department to record and maintain all the complaints received by the Vigilance team. Complaints can be tracked in the system online, through timely email alerts and user friendly reports.

In order to hone the skills, Vigilance Officers were deputed for Training Programs conducted by the Central Bureau of Investigations Training Academy and other Training Institutions.

The Vigilance Awareness Week was observed across the Company from 28.10.2013 to 2.11.2013 with the theme of "Promoting Good Governance – Positive Contribution of Vigilance". In order to inculcate ethics and good values amongst the youngsters during this period, various activities such as Debate Competition, Painting Contest and Skit program (topic: Encouraging ethical dealings) were conducted for school children. Quiz and Slogan competitions were organized for employees.

Corporate Vigilance continued its initiative on "Integrity Clubs" (IC) to instill ethical values in school children and transform them into valuable Change Agents in Civil Society. The first "Integrity Club" which started at Kochi Refinery School has now been extended to eight schools under Kendriya Vidyalaya Sangathan in Kerala. The activities of the Integrity Clubs at Kochi Refineries have been well received by all.

The fourth edition of the vigilance journal "Vigilance Plus" was released and received excellent feedback.

In a nut shell BPCL vigilance is undergoing a paradigm shift from punitive to participative and is now moving towards preventive.

SUBSIDIARY COMPANIES

Numaligarh Refinery Limited (NRL)

NRL was incorporated with an authorized share capital of Rs. 1000 crores in 1993. As on 31st March 2014, the paid up share capital of NRL is Rs. 735.63 crores of which BPCL holds 61.65% . The Company has a 3 MMTPA refinery at Numaligarh in Assam and was awarded the status of ''Category-I'' Miniratna PSU in the year 2003.

The refinery processed 2.61 MMT of crude oil during the year 2013-14, as compared to 2.48 MMT processed in the previous year, thus registering a capacity utilization of 87.1%, as compared to 82.7% in the previous year. The higher throughput during the year is mainly due to higher crude receipt of 2.67 MMT, compared to 2.45 MMT during the previous year. The refinery achieved the highest ever distillate yield of 92.16% against the previous year''s 91.11% and Specific Energy Consumption (SEC) of 53.6 MBN against the previous year''s 53.2 MBN. NRL''s distillate yield continues to be the highest amongst the public sector refineries in the country. As on 31st March, 2014 the Refinery completed 22.5 million man-hours of Lost Time Accident (LTA) free operations, equivalent to 12 years 1 month, since the date of the last LTA. NRL''s GRM in 2013-14 stood at USD 12.09 per barrel, compared to 2012-13 which stood at USD 10.52 per barrel. The overall gross margin for the refinery in 2013-14 amounted to Rs. 1,400.77 crores as against Rs. 1,040.09 crores in 2012-13.

NRL achieved Gross Revenue from Operations of Rs. 9,876.76 crores for the financial year ending 31st March, 2014 as compared to Rs. 8,757.01 crores in the previous year. The Company''s profit after tax for the year stood at Rs. 371.09 crores as against a profit of Rs. 144.26 crores in the previous year. Earnings per share (EPS) for the year 2013-14 was Rs. 5.04 compared to Rs. 1.96 in 2012-13. The Board of Directors of NRL has recommended a dividend of Rs. 1.60 per share of Rs. 10.00 each for 2013-14 as compared to Rs. 1.00 per share of Rs. 10 each for the previous year.

NRL''s net worth stands at Rs. 2,990.83 crores and book value per share Rs. 40.66 as at 31st March, 2014 against its net worth as on 31st March 2013 of Rs. 2,757.45 crores and book value per share of Rs. 37.48.

Bharat PetroResources Limited (BPRL)

Bharat PetroResources Ltd. (BPRL) was incorporated in the year 2006 as a wholly owned subsidiary company of BPCL with the objective of implementing BPCL''s plans in the upstream exploration and production sector. As on 31st March 2014, the authorized capital of BPRL is Rs. 3000 crores and the subscribed and paid up share capital of BPRL is Rs. 2620 crores. The exploration and production activities of BPRL and its subsidiary companies extend to 19 blocks worldwide, which are in various stages of exploration/ appraisal. Of this, 8 blocks are in India and 11 are abroad. Besides India, BPRL has Participating Interest (PI) in blocks in Australia, Brazil, East Timor, Indonesia and Mozambique. The total area of these 19 blocks (where BPRL/its subsidiaries have PI) is around 24,685 sq.km, of which approximately 88% is offshore acreage.

BPRL manages many of its overseas projects through subsidiary companies. In the year 2006, BPRL had formed a wholly owned subsidiary company, Bharat PetroResources JPDA Limited through which it holds a PI of 20% in Block-JPDA 06-103, in East Timor in the Joint Petroleum Development Area (between Australia and East Timor). Further, BPRL has incorporated a wholly owned subsidiary company, BPRL International BV, in the Netherlands which in turn, has three wholly owned subsidiary companies viz. BPRL Ventures BV, BPRL Ventures Mozambique BV and BPRL Ventures Indonesia BV. BPRL Ventures BV has a 50% stake in IBV Brasil Petroleo Limitada, which currently holds participating interests ranging from 20% to 40% in 7 blocks in offshore Brazil. BPRL Ventures Mozambique BV has participating interest of 10% in a block in Mozambique, and BPRL Ventures Indonesia BV holds participating interest of 12.5% in a block in Indonesia.

All the blocks of BPRL are under various stages of exploration/appraisal. BPRL has recorded consolidated income of Rs. 9.76 crores and a consolidated loss of Rs. 531.10 crores for the financial year ending 31st March, 2014 against income of Rs. 1.38 crores and a consolidated loss of Rs. 664.09 crores for the financial year ending 31st March, 2013. This was due to relinquishment of our participating interest in few blocks in view of poor prospectivity assessed based on drilling results.

Annual Accounts of the Subsidiary Companies

In view of the dispensation granted by the Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8th February, 2011, copies of the Balance Sheet, Statement of Profit and Loss, Directors'' Report and the Auditors'' Report of the Subsidiary Companies are not attached to the Balance Sheet of the Company. In compliance with the conditions of the dispensation, the Consolidated Financial Statements have been presented in the Annual Report and financial information of the Company''s subsidiaries, as required, is disclosed in the Annual Report as Annexure F to the Directors'' Report for information. The audited Annual Accounts of Subsidiary Companies and related detailed information are open for inspection to Members at BPCL''s Registered Office. Further, BPCL would make available / furnish these documents, on request, to any of its Members and the said documents would also be posted on BPCL''s website.

JOINT VENTURE COMPANIES

Bharat Oman Refineries Limited (BORL)

BORL is a Joint Venture Company between BPCL and Oman Oil Company, S.A.O.C (OOC). The present shareholding of the Company as on 31st March 2014 is 50% each by BPCL and OOC. The present paid up share capital is Rs. 1,777.23 crores. BPCL has also given an unsecured loan of Rs. 1354.10 crores. Till the time the total equity of BORL is tied up, BPCL and OOC will each hold 50% shares in BORL. Also, the state of Madhya Pradesh has a stake in BORL and has subscribed 2.69 crores warrants representing the right to subscribe to 2.69 crores of equity shares of face value of Rs. 10 each at a later date. It is expected that BPCL and OOC will ultimately hold 49% and 26% respectively in the fully diluted equity of BORL.

Bina Refinery, after commencement of its integrated operations in June 2011, stabilised its operations during the year 2013-14 and all plants had been tested individually for more than 100% capacity utilization.

During the year 2013-14, the refinery recorded a crude intake of 5.45 MMT and an overall capacity utilization of 91% against last year''s 5.7 MMT at an overall capacity utilization of 96%. Due to power and steam issues, the Refinery output was affected during the year under review. The Refinery''s GRM for the year 2013-14 stood at USD 9.30 per barrel with an overall gross margin of Rs. 2,217 crores against last year''s GRM of USD 9.1 per barrel with an overall gross margin of Rs. 2,046 crores.

BORL recorded a Gross Revenue from Operations of Rs. 31,161.04 crores in the financial year ended as on 31st March, 2014 as compared to Rs. 28,142.72 recorded in the previous financial year. The net loss for the year stood at Rs. 296.51 crores as compared to Rs. 247.84 crores in the previous year.

Petronet LNG Limited (PLL)

PLL was formed in April, 1998 for importing LNG and setting up LNG terminals with facilities like jetty, storage, regasification etc. to supply natural gas to various industries in the country. The Company has an authorised capital of Rs. 1,200 crore and paid up capital of Rs. 750 crores. PLL was promoted by four public sector companies viz. Bharat Petroleum Corporation Ltd, Indian Oil Corporation Ltd, Oil and Natural Gas Corporation Ltd and Gas Authority of India Ltd. Each of the promoters holds 12.5% of the equity capital of PLL. PLL is a listed Company with the public holding 34.80% of the paid up share capital of the Company. BPCL''s equity investment in PLL currently stands at Rs. 98.75 crores. As at 31st March, 2014, PLL had net worth of Rs. 4,986.12 crores with a book value of Rs. 66.48 per share.

PLL recorded Revenue from Operations of Rs. 37,747.58 crores in the financial year ended as on 31st March, 2014 as compared to Rs. 31,467.44 crores recorded in 2012-13. The net profit for the year stood at Rs. 711.92 crores as compared to Rs. 1,149.28 crores in the previous year. The EPS for the year 2013-14 amounted to Rs. 9.49 as compared to Rs. 15.32 in 2012-13. PLL has declared dividend of Rs. 2.00 per share for the financial year 2013-14 as compared to Rs. 2.50 per share in the previous year.

Indraprastha Gas Limited (IGL)

IGL, a Joint Venture Company with GAIL as the other co-promoter, was set up in December, 1998 with an authorised capital of Rs. 220 crores for implementing the project for supply of Compressed Natural Gas (CNG) to the household and automobile sectors in Delhi. The paid up share capital of the Company is Rs. 140 crores. BPCL invested Rs. 31.50 crores in IGL for 22.5% stake in its equity. IGL is a listed Company. IGL has commissioned over 325 CNG stations which supply environment friendly fuel to more than 7,50,000 vehicles. IGL has more than 4,70,000 domestic PNG customers and over 1300 commercial customers in Delhi. The Company is also extending its business to the town of Greater Noida and Ghaziabad. IGL has acquired 50% of the equity held by financial institutions in Central UP Gas Limited, a Joint Venture Company promoted by BPCL and GAIL.

IGL has registered Revenue from Operations of Rs. 4,332.53 crores and a profit after tax of Rs. 360.26 crore for the financial year ending as on 31st March, 2014 as compared to a turnover of Rs. 3,726.39 crores and a profit after tax of Rs. 354.13 crores in the previous year. IGL has retained dividend of Rs. 5.50 per share in line with last year''s dividend of Rs. 5.50 per share. IGL''s net worth was Rs. 1,763.16 with a book value of Rs. 125.94 per share as at 31st March, 2014. The shares of the Company are listed on the Stock Exchanges. The final accounts for the current year are subject to an order pending by PNGRB against which IGL has gone in appeal.

Sabarmati Gas Limited (SGL)

SGL, a Joint Venture Company promoted by BPCL and Gujarat State Petroleum Corporation (GSPC) was incorporated on 6th June 2006 with an authorized capital of Rs. 100 crores for implementing the City Gas distribution project for supply of CNG to the household and automobile sectors in Gandhinagar, Mehsana and Sabarkantha Districts of Gujarat. The paid up share capital of the Company is Rs. 20 crores.

Both the promoters have a stake of 25% each in the equity capital of SGL and the balance has been subscribed to by financial institutions. SGL has set up 33 CNG stations. SGL has achieved a Gross Revenue from Operations of Rs. 971.01 crores and net profit of Rs. 26.49 crores for the financial year ending 31st March, 2014 against a turnover of Rs. 881.55 crores and loss of Rs. 34.27 crores in the previous year. The Company has proposed a dividend on equity shares at the rate of Rs. 2 per equity share for the financial year ending 31st March, 2014.

Central UP Gas Limited (CUGL)

CUGL is a Joint Venture Company set up in March, 2005 with GAIL as the other partner for implementing the project for supply of CNG to the household, industrial and automobile sectors in Kanpur and Bareilly in Uttar Pradesh. The authorised and paid up share capital of the Company is Rs. 60 crores. The joint venture partners viz. BPCL and GAIL invested Rs. 15 crores each for an equity stake of 25% each in the Company. Indraprastha Gas Ltd., our Joint Venture has taken over 50% of the shares held by these financial institutions. CUGL has set up 13 CNG stations and is carrying on PNG operations.

CUGL has achieved a Gross Revenue from Operations of Rs. 215.23 crores and net profit of Rs. 25.43 crores for the financial year ending 31st March, 2014 as compared to a Gross Revenue from Operations of Rs. 161.15 crores and a net profit of Rs. 20.98 crores in the previous year. The EPS for the year stood at Rs. 4.24 as against Rs. 3.50 in 2012-13. The Board of Directors has recommended the payment of dividend at Rs. 1.25 per share for the current year, which is the same as that of the previous year.

Maharashtra Natural Gas Limited (MNGL)

MNGL was set up on 13th January 2006 as a Joint Venture Company with GAIL for implementing the project for supply of CNG to the household, industrial and automobile sectors in Pune and its nearby areas. The Company was incorporated with an authorised share capital of Rs. 100 crores. The paid up share capital of the Company is Rs. 95 crores. BPCL and GAIL have invested Rs. 22.50 crores each in MNGL''s equity capital. The Maharashtra Government provisionally agreed to hold a 5% stake in the Company. The balance equity shares have been subscribed by Pan Asia, IDFC, ILFS and Axis Bank as shareholders. The Company has set up 28 CNG stations so far.

MNGL has achieved a turnover of Rs. 343.90 crores for the financial year ending 31st March, 2014 and profit of Rs. 55.68 crores for the year, as against a turnover of Rs. 200.05 crores and profit of Rs. 38.50 crores in the previous year. The MNGL Board has not yet recommended a dividend on equity share for the financial year ending 31st March, 2014. Last year, the dividend declared was Rs. 0.80 per share.

Bharat Stars Services Private Limited (BSSPL)

BSSPL, a Joint Venture Company promoted by BPCL and ST Airport Pte Limited, Singapore was incorporated on 13th September, 2007 for providing into-plane fuelling services at the new Bengaluru International Airport. The Company was incorporated with an authorised share capital of Rs. 20 crores. The paid up share capital of BSSPL is Rs. 20 crores.

The two promoters have each subscribed to 50% of the equity share capital of BSSPL and BPCL''s present investment stands at Rs. 10 crores. The Company, which commenced its operations at the new international airport in Bengaluru from May, 2008 has also incorporated a wholly owned subsidiary for implementing into-plane fuelling services at the new T3 Terminal of Delhi International Airport. The Company is also planning to enter Calicut Airport and other nearby airports.

BSSPL has achieved a turnover of Rs. 12.99 crores for the financial year ending 31st March, 2014 and profit of Rs. 2.72 crores, as against a turnover of Rs. 11.69 crores and a profit of Rs. 1.95 crores in the previous year. The Board has recommended a dividend of Rs. 0.25 per equity share for the financial year ending 31st March, 2014, the same as that of last year.

Bharat Renewable Energy Limited (BREL)

BREL was incorporated on 17th June, 2008 for undertaking the production, procurement, cultivation and plantation of horticulture crops such as Karanj, Jatropha and Pongamia, trading, research and development and management of all crops and plantation including Biofuels in the State of Uttar Pradesh, with an authorized capital of Rs. 30 crores. The paid up share capital of the Company is Rs. 9.22 crores. The Company has been promoted by BPCL with Nandan Cleantec Limited (erstwhile Nandan Biomatrix Limited), Hyderabad and the Shapoorji Pallonji group, through their affiliate SP Agri Management Services Private Limited. The Government of Uttar Pradesh has approved the project under "Jeevan Jyoti," a scheme of the Government which has the benefit of release of funds under the Mahatma Gandhi National Rural Employment Guarantee (MGNREG) scheme.

BREL has earned revenue of Rs. 0.43 crores for the financial year ending 31st March, 2014 and incurred a loss of Rs. 1.69 crores as against a revenue of Rs. 0.41 crores and loss of Rs. 2.13 crores in the previous year.

Matrix Bharat Pte Limited (MBPL)

MBPL is a Joint Venture Company incorporated in Singapore on 20th May, 2008 for carrying on the bunkering business and supply of marine lubricants in the Singapore market, as well as international bunkering including expanding into Asian and Middle East markets. The Company has been promoted by BPCL and Matrix Marine Fuels LP USA, an affiliate of the Mabanaft group of companies, Hamburg, Germany. The Company has subscribed 20 lakh shares for an equivalent sum of Rs. 8.41 crores. Both the partners have contributed equally to the share capital. Matrix Marine Fuels LP USA has subsequently transferred their share and interest in the joint venture in favour of Matrix Marine Fuels Pte Limited, Singapore, another affiliate of the Mabanaft group. The Company was previously known as Matrix Bharat Marine Services Pte Limited before it was changed to Matrix Bharat Pte Limited.

MBPL has achieved revenue of USD 837.82 million and earned a profit of USD 1.05 million for the year ending 31st December, 2013, as compared to a turnover of USD 566.97 million and a loss of USD 3.98 million in the previous year.

Petronet India Limited (PIL)

BPCL has 16% equity participation with an investment of Rs. 16 crores in PIL, which was formed as a non-government financial holding company for the development of a pipeline network throughout the country. PIL has facilitated pipeline access on a common carrier principle through joint ventures for pipelines put up by them viz. Vadinar-Kandla, Kochi- Coimbatore-Karur and Mangalore–Hassan-Bangalore. PIL registered income of Rs. 0.19 crores and a net loss of Rs. 0.06 crores for the financial year ending 31st March, 2014 as against income of Rs. 0.26 crores and a net loss of Rs. 0.09 crores in the previous year.

The new pipeline policy announced by the Government of India some time back has affected the future of the company, as interested companies are permitted to undertake pipeline projects and PIL does not have any new projects in hand. As such, promoters and other investors in PIL have reached a conclusion that continuation of PIL would not be viable. Accordingly, the winding up process has been initiated and the process of divesting PIL''s 26% equity in the three joint venture companies promoted by it is in progress. The Board of Directors of BPCL, at its meeting held in December 2006, accepted PIL''s offer to buy 26% stake in the equity of Petronet CCK Limited, where BPCL already holds 49% of the paid up share capital.

Petronet CCK Limited (PCCKL)

BPCL has invested a sum of Rs. 49 crores for a 49% stake in the equity capital of PCCKL, a Joint Venture Company promoted with PIL with an authorised capital of Rs. 135 crores. The paid up share capital of the Company is Rs. 100 crores. The Company owns the 292 km long multi-product Kochi- Karur pipeline from BPCL''s installation of Irimpanam to Karur for transportation of MS, HSD and SKO. The pipeline commenced commercial operations from September, 2002.

The pumping volume during the year 2013-14 amounted to 2.44 MMT, as against 2.60 MMT in the previous year. PCCKL registered a turnover of Rs. 92.91 crores and net profit of Rs. 44.54 crores for the financial year ending 31st March, 2014 as compared to a turnover of Rs. 90.42 crores and net loss of Rs. 18.83 crores in the previous year. BPCL has initiated steps, subject to completion of all formalities, to purchase the 26% share of PIL in PCCKL. The Board has recommended a dividend of Rs. 0.50 per equity share for the financial year ending 31st March, 2014.

Delhi Aviation Fuel Facility Private Limited (DAFFPL)

A Joint Venture Company, DAFFPL has been promoted by BPCL, IOCL and Delhi International Airport Limited (DIAL) for implementing Aviation Fuel facility for the new T3 terminal at Delhi International Airport. The authorized share capital of the Company is Rs. 170 crores. The paid up share capital of the Company is Rs. 164 crores. BPCL and IOCL have subscribed to 37% of the share capital of the Joint Venture, while the balance has been taken by DIAL. BPCL''s onsite assets at Delhi Airport were transferred to the Joint Venture. DAFFPL has registered a turnover of Rs. 99.01 crores and net profit of Rs. 30.10 crores for the financial year ending 31st March, 2014 as against a turnover of Rs. 95.36 crores and net profit of Rs. 29.63 crores in the previous year. The Company has proposed dividend of Rs. 1.25 per share for the financial year ending 31st March 2014, as against Rs. 1.20 per equity share declared in the previous year.

Kannur International Airport Limited (KIAL)

The Government of Kerala has promoted KIAL as a public limited company to establish, operate, manage, undertake and maintain airports and allied infrastructure facilities at Kannur and/or other parts of India and to provide other services, either individually or in association with other undertakings or companies in India or abroad. To start with, KIAL would set up an Airport at Kannur in the state of Kerala at an estimated project cost of Rs. 1,792 crores, of which Rs. 1,000 crores will be financed through equity and the balance sum will be financed by borrowed funds.

BPCL has signed an MOU with Kannur International Airport for building a new International Airport at Kannur. BPCL is a shareholder in KIAL and has made an initial contribution of Rs. 70 crores out of the total contribution sanctioned by the BPCL Board amounting to Rs. 170 crores for 17% equity stake in the Company.

GSPL India Transco Limited

BPCL has signed a Joint Venture Agreement in April, 2012 with Gujarat State Petronet Ltd., IOCL and HPCL for laying the Mehsana-Bhatinda (MBPL) and Bhatinda-Jammu- Srinagar (BJSPL) gas pipelines. GSPL India Transco Limited will be executing the project and BPCL will contribute 11% of the total equity of the Company. The balance will be contributed by GSPL (52%), IOCL (26%) and HPCL (11%).

BPCL''s has made the initial equity contribution of Rs. 12.65 crores. The Company earned a miscellaneous income of Rs. 2.43 crores and net profit of Rs. 1.64 crores for the financial year ending 31st March, 2014 against Rs. 1.23 crores and Rs. 0.83 crores respectively for the previous year.

GSPL India Gasnet Limited

BPCL has signed a Joint Venture Agreement on 30th April, 2012 with Gujarat State Petronet Ltd, IOCL and HPCL for laying the Mallavaram-Bhopal-Bhilwara-Vijaipur (MBBVPL) gas pipeline. GSPL India Gasnet Limited will be executing the project and BPCL will contribute 11% of the Company''s total equity capital. The balance will be contributed by GSPL (52%), IOCL (26%) and HPCL (11%).

BPCL has made the initial equity contribution of Rs. 15.07 crores. The Company earned a miscellaneous income of Rs. 2.34 crore and net profit of Rs. 1.58 crore for the financial year ending 31st March, 2014, as against Rs. 0.95 crores and Rs. 0.65 crores respectively for the previous year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The details regarding energy conservation, technology absorption and foreign exchange used and earned as required by Section 217(1)(e) of the Companies Act, 1956, are given in Annexure A.

MEMORANDUM OF UNDERSTANDING WITH MINISTRY OF PETROLEUM & NATURAL GAS

BPCL, for the twenty-fifth successive year, has entered into a Memorandum of Understanding (MOU) for the year 2014-15 with the Ministry of Petroleum & Natural Gas. BPCL has been achieving an "Excellent" performance rating since 1990-91.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)

Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is enclosed as Annexure C.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement and Department of Public Enterprises (DPE) Guidelines, the Report on Corporate Governance, together with the Auditors'' Certificate on compliance of Corporate Governance, is annexed as Annexure B. The Report indicates the extent of compliance of the Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs.

The Company has engaged M/s. Dholakia & Associates, Company Secretaries for conducting the Secretarial Audit for the year 2013-14. The Secretarial Audit Report is enclosed as part of Annexure B.

The Management Discussion and Analysis Report (MD&A) forms part of the Annual Report. The forward looking statements made in the MD&A are based on certain assumptions and expectations of future events. The Directors cannot guarantee that these assumptions are accurate or these expectations will materialize.

SOCIAL, ENVIRONMENTAL AND ECONOMIC RESPONSIBILITIES

BPCL is committed to be a responsible corporate citizen in society, which leads to sustainable growth and economic development for the nation as well as all stakeholders. In order to be a responsible business to meet its commitment, the Board of Directors of the Company has adopted and delegated to the Sustainability Committee the review and implementation of Business Responsibility Policies based on the principles of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business as issued by the Ministry of Corporate Affairs, Government of India. In line with the above and Clause 55 of the Listing Agreement, a Business Responsibility Report is forming part of the Annual Report. This Report is in addition to BPCL''s Sustainability Reporting in accordance with the Global Reporting Initiative (GRI).

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors of BPCL confirm that:

1) In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

2) The Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as on 31st March 2014 and of the Statement of Profit and Loss of the Company for the year ended on that date.

3) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4) These Accounts have been prepared on a going concern basis.

DIRECTORS

Shri R. N. Choubey, Director General, Directorate General of Hydrocarbons, Ministry of Petroleum & Natural Gas (MoPNG) resigned from the Board with effect from 10.4.2013. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company''s business.

Dr. Neeraj Mittal, Joint Secretary (Marketing), MoPNG was appointed as Additional Director on the Board and Government Nominee Director with effect from 11.4.2013. The Shareholders have appointed him as Director of the Company at the Annual General Meeting (AGM) held on 20.9.2013.

Shri Tom Jose, Managing Director, Kerala State Industrial Development Corporation resigned from the Board with effect from 25.11.2013. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company''s business.

Shri P. H. Kurian, Principal Secretary (Industries & IT), Government of Kerala was appointed as Additional Director on the Board and Government Nominee Director with effect from 25.11.2013. As he has been appointed as Additional Director, he will hold office till the ensuing AGM. Notice under Section 160 of the Companies Act, 2013 has been received from a Member proposing his name for appointment as Director at the ensuing AGM.

Shri P. Balasubramanian, Executive Director (Corporate Finance) was appointed as Additional Director on the Board and Director - Finance with effect from 1.4.2014. As he has been appointed as Additional Director, he will hold office till the ensuing AGM. Notice under Section 160 of the Companies Act, 2013 has been received from a Member proposing his name for appointment as Director-Finance at the ensuing AGM.

Shri S.P. Gathoo, Director, will retire by rotation at the ensuing AGM and being eligible, offer himself for re-appointment as Director at the said Meeting.

In compliance with the provisions of Section 149 read with Schedule IV of the Companies Act, 2013, the appointment of Prof J. R. Varma and Shri B. Chakrabarti as Independent Directors are now being placed before the Members at the AGM for their approval.

As required under the Corporate Governance Clause, brief resume of the above Directors who are appointed / reappointed at the AGM, is provided as part of the AGM Notice.

STATUTORY AUDITORS

CNK & Associates LLP, Chartered Accountants, Mumbai and Haribhakti & Co. LLP, Chartered Accountants, Mumbai, were appointed as Statutory Auditors for the year 2013-14, by the Comptroller & Auditor General of India (C&AG), under the provisions of Section 619 (2) of the Companies Act, 1956. They will hold office till the ensuing Annual General Meeting.

The said firms have been appointed as the Statutory Auditors also for the financial year 2014-15 by the C&AG.

AUDITORS'' REPORT Standalone Financial Statements

The Statutory Auditors of the Company have given an unqualified report on the standalone accounts of the Company for the financial year 2013-14. However, in the Report on Other Legal and Regulatory Requirements, they have mentioned that some disclosures as required under Accounting Standard 19 "Accounting for Lease" have not been made by the Company (refer note no. 43 of the financial statements).

The matter has been adequately explained in Note no. 43 referred to by the auditors which is reproduced below:

"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 AS - 19, are in the process of compilation."

Consolidated Financial Statements

The Statutory Auditors of the Company have given a qualified report on the consolidated accounts of the Company in respect of Note no. 45 (g) pertaining to the Joint Venture Company, Bharat Oman Refineries Limited for the financial year 2013-14.

The matter referred to in the qualification has been adequately dealt with in the respective note as referred to by the auditor which is reproduced below:

Note No. 45 (g): Bharat Oman Refineries Limited (Joint Venture Company)

The Company has during the year recalculated the depreciation on Plant and Machinery, Storage Tanks and other assets related to refinery based on the estimated useful life of 25 years for such assets effective from the date of capitalization considering that the depreciation so computed would -

i. Result in charging fair proportion of depreciation during the estimated useful life,

ii. Reflect the true and fair view of the value of assets, and

iii. Be in line with the useful life specified under Schedule II of the Companies Act, 2013, which is effective from 1st April, 2014.

The Company has applied to the Ministry of Corporate Affairs seeking their permission to adopt the rate of depreciation based on the useful life of the aforesaid assets effective from the date of capitalization.

This recalculation in depreciation has resulted in lesser charge of depreciation for the year to the extent of Rs. 161.85 crores and reversal of depreciation of the previous years to the extent of Rs. 301.14 crores. Consequently, the accumulated depreciation and accumulated losses are lower to the extent of Rs. 462.99 crores. The auditors of BORL have qualified their report for the above.

COST AUDITORS

During the year 2013-14, the Cost Audit Report has been filed with the Ministry of Corporate Affairs on 26. 9.2013 in XBRL Format as per the requirements of The Companies (Cost Audit Report) Rules, 2011. The due date for filing the cost audit report was 30th September, 2013. This Cost Audit Report pertains to the year 2012-13 and the cost auditors were M/s. Rohit & Associates, Mumbai and M/s. Musib & Company, Mumbai.

The same cost auditors have been appointed for the year 2013-14. The due date for filing the cost audit reports for 2013-14 is 30th September, 2014, for which necessary action is being taken.

ACKNOWLEDGEMENTS

The year 2013-14 has registered record performance of the Company with the sincere efforts and commitment of BPCL''s employees. Appreciation for the performance results is recorded hereby by the Directors.

The Directors acknowledge the support and guidance received from various Ministries of the Government of India, particularly the Ministry of Petroleum & Natural Gas, and from various State Governments that helped BPCL to progress well, scaling new heights.

The Directors convey their appreciation for the continued support of all stakeholders including shareholders, customers, dealers, distributors, vendors, contractors and other business partners.

The Directors would like to affirm and remain committed to working towards enhancing shareholder value. For and on behalf of the Board of Directors

Sd/- Mumbai S.Varadarajan Date: 12th August, 2014 Chairman & Managing Director


Mar 31, 2013

The Directors take pleasure in presenting their Report on the performance of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31st March, 2013.

PERFORMANCE OVERVIEW

Group Performance

The aggregate Refinery throughput at BPCL''s Refineries at Mumbai and Kochi, along with that of its subsidiary company, Numaligarh Refinery Limited (NRL) and Joint Venture Company, Bharat Oman Refineries Limited (BORL) in 2012-13 was 28.55 Million Metric Tonnes (MMT) as compared to 26.72 MMT in 2011-12. The market sales of the BPCL Group grew from 31.48 MMT in 2011-12 to 33.67 MMT in 2012-13. The BPCL group also exported 3.22 MMT of petroleum products during the year as against 3.49 MMT in the previous year.

The financial year saw the group achieve a Gross Revenue from Operations of Rs. 2,53,285.57 crores, as compared to Rs. 2,23,314.64 crores recorded in 2011-12. The Profit after Tax stood at Rs. 1,936.15 crores in 2012-13, as against Rs. 851.28 crores in the previous year. After setting off the minority interest, the Group earnings per share increased from Rs. 10.80* in 2011-12 to Rs. 26.01 in the current year.

CONSOLIDATED GROUP RESULTS

2012-13 2011-12

Physical Performance

Crude Throughput (MMT) 28.55 26.72

Market Sales (MMT) 33.67 31.48

Financial Performance Rs. Crores

Gross Revenue from Operations 2,53,285.57 2,23,314.64

Less: Excise Duty Paid (11,104.59) (11,175.08)

Net Revenue from Operations 2,42,180.98 2,12,139.56

Gross Profit 8,201.25 6,269.32

Finance Cost 2,518.29 2,259.06

Depreciation & amortisation expense 2,462.70 2,410.83

Profit before tax 3,220.26 1,599.43

Provision for taxation - Current (Net of MAT Credit Entitlement) 1,398.88 409.35

Profit after Current Tax 1,821.38 1,190.08

Provision for taxation - Deferred (Asset)/ Liability (72.65) 331.63

Short /(Excess) provision for Taxation in earlier years provided for (42.12) 7.17

Net Profit 1,936.15 851.28

Minority Interest 55.32 70.45

Net Income of the group attributable to BPCL 1880.83 780.83

Group Earnings per share attributable to BPCL (Rs.) 26.01 10.80*

*Adjusted for 1:1 Bonus issue by BPCL in July, 2012

COMPANY RESULTS

2012-13 2011-12

Physical Performance

Crude Throughput (MMT) 23.21 22.91

Market Sales (MMT) 33.30 31.14

Rs. Crores

Financial Performance

Gross Revenue from Operations 2,50,649.26 2,22,500.47

Gross Profit 7,787.03 5,568.63

Finance Cost 1,825.24 1,799.59

Depreciation & amortisation expense 1,926.10 1,884.87

Profit before tax 4,035.69 1,884.17

Provision for Taxation - Current (Net of MAT Credit Entitlement) 1,173.29 178.07

Provision for Taxation - Deferred 255.16 393.01

Short/(Excess) provision for taxation in earlier years provided for (35.66) 1.82

Net Profit 2,642.90 1,311.27

Balance brought forward 500.00 500.00

Amount available for disposal 3,142.90 1,811.27

The Directors propose to appropriate this amount as under:

Towards Dividend:

Final (proposed) Dividend 795.39 397.70

Corporate Dividend Tax 127.47 57.16

For transfer to General Reserve 1,720.04 856.41

Balance carried to Balance Sheet 500.00 500.00

Summarized Cash Flow Statement :

Cash Flows:

Inflow/(Outflow) from operations 5,478.98 925.84

Inflow/(Outflow) from investing activities (2,385.69) (890.54)

Inflow/(Outflow) from financing activities (714.35) (4,713.14)

Net increase/(decrease) in cash & cash equivalents 2,378.94 (4,677.84)

Company Performance

BPCLs Revenue from operations for 2012-13 amounted to Rs. 2,50,649.26 crores, reflecting an increase of 12.65 % over the previous year''s revenues of Rs. 2,22,500.47 crores. The profit before tax for the year was Rs. 4,035.69 crores, as compared to Rs. 1,884.17 crores in 2011-12. After providing for tax, (including deferred tax) of Rs. 1,392.79 crores, as against Rs. 572.90 crores in 2011-12, the profit after tax for the year stood at Rs. 2,642.90 crores, as against Rs. 1,311.27 crores in the previous year. This is the highest level of profit after tax achieved by the Company in a single financial year.

During the year 2012-13, the Company has issued Bonus Shares in the ratio of 1:1. Accordingly, the paid-up equity capital stands increased to Rs. 723.08 crores from the pre-bonus level of Rs. 361.54 crores. BPCL''s net worth as on 31st March, 2013 stands at Rs. 16,634.02 crores, as compared to Rs. 14,913.86 crores as at the end of the previous year.

The earnings per share in 2012-13 stood at Rs. 36.55 in 2012-13 as compared to Rs. 18.13 (adjusted for 1:1 bonus issue in July 2012) in 2011-12. Internal cash generation during the year was higher at Rs. 4,001.68 crores, as compared to Rs. 3,134.99 crores in 2011-12. BPCL''s contribution to the exchequer by way of taxes and duties during 2012-13 amounted to Rs. 38,028.20 crores, as againstRs. 35,994.30 crores in 2011-12.

Dividend

The Board of Directors has recommended a dividend of 110% (Rs. 11 per share) for the year on the paid-up share capital of Rs. 723.08 crores, which will absorb a sum of Rs. 922.86 crores out of the profit after tax, inclusive of Rs. 127.47 crores for Corporate Dividend Tax on distributed profits.

Borrowings

In October, 2012, BPCL issued its first USD 500 million, 10- year Senior Unsecured International Bonds with a coupon rate of 4.625%. The money raised would be used for funding the capital projects in the refineries. During the year, BPCL also issued Secured Non Convertible Debentures amounting to Rs. 700 crores carrying an interest of 8.65%. The tenor of the Debentures is 5 years with a put/call option at the end of 3 years.

Borrowings from banks decreased from Rs. 20,749.94 crores as at 31st March, 2012 to Rs. 18,774.07 crores at the close of the current financial year. The outstanding balance of Loans from Oil Industry Development Board stood at Rs. 593.50 crores as at 31st March, 2013, as compared to Rs. 743.75 crores at the end of the previous year. The Collateralized Borrowing and Lending Obligation (CBLO) through Clearing Corporation of India Limited amounted to Rs. 622 crores as at 31st March, 2013. Commercial Paper amounting to Rs. 430 crores remained outstanding as on 31st March 2013, as compared to Nil as on 31st March 2012.

The amount of deposits, matured but unclaimed, at the end of the year was Rs. 0.15 crores, which pertains to 38 depositors.

Capital Expenditure

The total Capital Expenditure during the year 2012-13 amounted to Rs. 3,544.40 crores, as compared to Rs. 2,761.81 crores during the previous year.

C&AG Audit

The Comptroller and Auditor General of India (C&AG) has no comment upon or supplement to the Statutory Auditors'' Report on the Accounts for the year ended 31st March 2013. The letter from C&AG is annexed as Annexure E.

REFINERIES

MUMBAI REFINERY

During the year 2012-13, Mumbai Refinery recorded a throughput of 13.10 MMT of feedstock (crude oil and other feedstock), as against 13.35 MMT achieved in 2011-12. This represents capacity utilization of 109% as compared to 111% in the previous year. The throughput was marginally lower as compared to the previous year due to the planned shutdown of two crude processing units during the year.

For the year under review, refinery achieved its highest ever production of Propylene (C3), Motor Spirit (Euro III MS), High Speed Diesel (HSD), Bitumen, Linear Alkyl Benzene Feedstock (LABFS) and Lube Base Oils.

The Gross Refining Margin (GRM) for the year stood at USD 4.67 per barrel, as compared to USD 1.73 per barrel realized in 2011-12. The overall gross margin for the refinery in 2012-13 amounted to Rs. 2499 crores, as compared to Rs. 831 crores in 2011-12. The higher

GRM in Mumbai Refinery for the year 2012-13 can be attributed to higher distillate yield, favorable crude mix and better product cracks, coupled with reduction in octroi under-recovery on account of implementation of the State Surcharge (SSC) Recovery Scheme.

KOCHI REFINERY

Kochi Refinery achieved a throughput of 10.1 MMT in 2012-13, as compared to 9.56 MMT in 2011-12. This was the first year that the throughput at the refinery has crossed the 10 MMT mark. The capacity utilization of the refinery during the year was 106.3%, as against 100.6% in the previous year. During the year, Kochi Refinery recorded its highest ever production of Propylene, Euro III MS, Euro III HSD, Euro IV HSD and Aviation Turbine Fuel (ATF).

The GRM for the year was USD 5.36 per barrel amounting to Rs. 2211 crores, which is the highest ever achieved by Kochi Refinery in a single financial year. The refinery had earned a GRM of USD 3.09 per barrel in 2011-12 amounting to Rs. 1061 crores. The reasons for the higher GRM achieved in 2012-13, include better product cracks (realisation), improved reliability of major units and improved steam management leading to lower fuel and loss.

The details of the performance of the Refineries, their activities and future plans are discussed in the Management Discussion and Analysis Report (MD&A).

MERGER OF KRL WITH BPCL

As informed in the last year''s Report, merger of the erstwhile Kochi Refineries Limited (KRL) with BPCL under Sections 391 to 394 of the Companies Act 1956 had been completed, following receipt of the Order dated 18th August, 2006 issued by the Ministry of Corporate Affairs, New Delhi. One of the Shareholders of the erstwhile KRL had filed a Writ Petition in the Delhi High Court challenging the merger, and the same is pending as on date.

MARKETING

During the year, 2012-13, BPCL''s market sales volume touched a level of 33.30 MMT, as compared to 31.14 MMT achieved in the previous year. This represented a growth rate of 6.94% over the previous year. BPCLs market share amongst the public sector oil companies stood at 23.14% as at 31st March, 2013, as compared to 22.30% as at the end of the previous year.

A detailed discussion of the performance of the Marketing function is given in the MD&A.

PROJECTS

Integrated Refinery Expansion Project at Kochi

The Board of Directors, at their meeting held on 30th March, 2012, approved the proposal for undertaking the Integrated Refinery Expansion Project (IREP) at Kochi.

The project will involve a capital outlay of Rs. 14,225 crores. The environment clearance for the project from the Ministry of Environment & Forests has been received on 22nd November, 2012. The project is expected to be mechanically completed within 42 months from this date. The project envisages capacity expansion of Kochi refinery by 6 Million Metric Tonnes Per Annum (MMTPA), taking it to 15.5 MMTPA and modernisation of processing facilities to produce auto fuels conforming to Euro IV/ Euro V specifications. It also envisages refinery residue stream upgradation to value added products.

The process packages of all new units viz. Crude & Vacuum Unit, VGO Hydro Treater Unit, Petro FCC Unit, Diesel Hydro Treater Unit, Delayed Coker Unit, Sulphur Unit & Tail Gas Treater Unit have been received. Detailed engineering of these units is currently in progress. Revamp of the existing Semi Regenerative Reformer into an Isomerisation Unit is also being done as part of the IREP project.

Civil work at the site is currently underway. Major long lead items like CDU/VDU columns, DHDT reactors & VGO HDT reactor have been ordered. Major contracts like the Heater package of CDU/VDU, civil/structural jobs of CDU/VDU, DCU & Offsites have been awarded. Tendering and ordering of other equipment and contracts are in progress. The Industrial Entrepreneur Memorandum and Essentiality Certificate has been received from Ministry of Industry and Ministry of Petroleum & Natural Gas, which would enable import of capital goods for the project at concessional duty rates. As on 30th June, 2013, the project has achieved physical progress of 8.8% and the cumulative expenditure stood at Rs. 410 crores.

BPCL also plans to enter the Petrochemicals segment by using the feedstock to be produced at the refinery after commissioning of the IREP BPCL is examining several options in this regard including implementing the petrochemicals initiative as a joint venture or by direct sourcing of technology from Licensors. This venture is estimated to involve an outlay of approximately Rs. 5000 crores.

Capacity Augmentation of Kota-Piyala Section of MMBPL Pipeline

The project envisages enhancement of capacity of the Kota-Piyala Section of the Mumbai-Manmad- Manglia-Piyala-Bijwasan pipeline from 2.54 MMTPA to 4.4 MMTPA, to evacuate products from Bina Refinery and also meet the growing demand for petroleum products in the Northern region.

The approved project cost is Rs. 152.89 crores. The project is mechanically complete and commissioning activities are currently in progress. As on 30th June, 2013, the cumulative expenditure on the project was Rs. 115.48 crores.

Kota Jobner Pipeline Project

The project envisages laying of a 210 km long and 14"(35.6 cms) dia. cross-country pipeline from Kota to Jobner (near Jaipur) for economic transportation of MS/SKO/ HSD from BPCL''s Mumbai Refinery as well as BORLs refinery at Bina. The estimated as-built project cost is Rs. 276.27 crores.

Petroleum and Natural Gas Regulatory Board (PNGRB) authorization for laying the pipeline and environmental clearance has been received. The project has achieved an overall physical progress of 19% with cumulative expenditure of Rs. 12.28 crores as on 30th June, 2013. The project is scheduled for completion in December 2014.

Continuous Catalytic Regeneration Reformer (CCR) Facilities and Hydrocracker Revamp at Mumbai Refinery

The project has been undertaken to increase the production of Euro IV grade MS and HSD at Mumbai Refinery. This involves revamping of the Hydrocracker Unit to increase its capacity from 1.75 MMTPA to 2.0 MMTPA and setting up a new Continuous Catalytic Regeneration Reformer Unit (CCR) of 1.2 MMTPA capacity with matching new Naphtha Hydro Treater Unit (NHT) and new Pressure Swing Adsorber (PSA) Units and other utilities/offsite facilities at an approved cost of Rs. 1827 crores.

Hydrocracker revamp has been completed. As regards the CCR facilities, all site development activities, erection of Hydrogen rich gas compressor, Recycle gas compressor and PSA Compressor and Catalyst loading PSA have been completed. Piping works for the compressors and work on cooling towers are in progress. As on 30th June, 2013, the project has achieved an overall progress of 92.47% with a cumulative expenditure of Rs. 1,439.21 crores.

Replacement of CDU /VDU at Mumbai Refinery

The project envisages installation of a state-of-the-art integrated Crude and Vacuum Distillation Unit of 6 MMTPA capacity to improve mechanical integrity and enhance safety and environment in place of existing old standalone Crude and Vacuum Units.

The approved cost of the project is Rs. 1,419 crores. Petroleum and Explosive Safety Organisation (PESO) clearance and environment clearance have been obtained. The basic design and engineering package has been completed. Orders have been placed for the Crude and Vacuum Column, LGO Stripper Column and CS Column. Structural fabrication of the new shop complex is completed. Dismantling of the old shop complex is in progress. The project has achieved an overall physical progress of 28.75% with cumulative expenditure of Rs. 96.64 crores as on 30th June, 2013. The project is scheduled for completion in December 2014.

Pipeline for Transfer of LPG from BPCR / HPCR Mumbai to Uran

The project envisages laying a 28 km pipeline (12 kms offshore and 16 kms onshore) and provision of 3 x 900 MT Mounded Storage Vessels (MSVs) at BPCLs Uran LPG Plant. 10" dia (25.4 cms) pipeline is being laid to transfer LPG from BPCL''s Mumbai refinery and the Mumbai refinery of Hindustan Petroleum Corporation Limited (HPCL). The pipeline portion of the project costing Rs. 229.59 crores will be shared equally with HPCL. The MSVs are expected to cost around Rs. 47.24 crores and will be on BPCL''s account.

The onshore pipeline laying and 10 km of offshore pipeline laying has been completed. The balance offshore pipeline laying will be taken up after the monsoon. The forest clearance and permission for cutting mangroves from the Bombay High Court has been received. The project has achieved an overall physical progress of 97% with cumulative expenditure of Rs. 228.47 crores as on 30th June, 2013. The project is expected to be completed by September 2013.

RESEARCH & DEVELOPMENT (R&D)

The Research and Development Centres of BPCL are consistently following the global trends of technology innovations for energizing lives. The R&D Centres are actively involved in supporting the businesses through constant advanced technical support and novel product/ process technology development in niche areas leading to new business development. The core research areas are broadly divided into four categories, namely Refinery processes upgradation/optimization, development of novel energy efficient technologies, product development and alternative fuels and energy. R&D capabilities at the Corporate R&D Centre at Greater Noida, Uttar Pradesh, Product & Application Development Centre at Sewree, Mumbai and the R&D Centre at Kochi Refinery are being leveraged towards business growth of the Company. BPCLs R&D programmes have been discussed separately in the MD&A.

Further, the areas covered under R&D and the benefits derived from R&D activities are detailed in Form B of Annexure A to the Directors'' Report.

NON-CONVENTIONAL ENERGY INITIATIVES

BPCL has been undertaking initiatives which are aimed at promoting green fuels, with a view to protect the environment and prevent pollution and reduce dependency on imported fuels. BPCL has initiated various steps to develop renewable sources of energy. BPCL has been engaged in setting up a Bio-diesel value chain in the State of Uttar Pradesh through its Joint Venture Company, M/s. Bharat Renewable Energy Ltd. (BREL), which envisages cultivating Bio-fuel plants on wasteland to produce Bio-diesel from Bio-fuel plantations. Apart from Jatropha, Pongamia plants are also being tried in Uttar Pradesh. The total plantation already covered is 8,987 acres (3,637 hectares) of wasteland and further plantation work is in progress.

BPCL is currently evaluating a proposal for setting up of a Wind Farm with 10 MW capacity in Maharashtra to set off the electricity consumed in the state. BPCL is also evaluating proposals to set up a Solar Farm of 5 to 10 MW capacity, either on its own or through joint ventures at select locations.

INDUSTRIAL RELATIONS

The overall Industrial Relations climate remained peaceful and cordial throughout the year. Long Term Settlements on wages have been successfully signed in Mumbai Refinery and Kochi Refinery with their respective Unions in May 2013.

FULFILLMENT OF SOCIAL OBLIGATIONS

During the year, BPCL retained its strong focus on Corporate Social Responsibility (CSR). The thrust areas continued to be education and water conservation. In addition to taking forward the various initiatives in the thrust areas, BPCL has added several new projects and entered into new partnerships with reputed Non-Government Organisations (NGOs). Through the CSR initiatives, BPCL has brought about positive change in many parts of the country.

The Memorandum of Understanding signed by the Company with the Ministry of Petroleum & Natural Gas every year specifies targets in the area of CSR. For the year 2012-13, BPCL had taken a target of reaching out to 50,000 children for imparting quality education, 20 villages for rainwater harvesting and 500 youth/women for livelihood/income generation training. BPCL was successful in achieving all these targets.

In the area of education, BPCL initiated a unique Science Education Program in collaboration with the NGO, ''Agastya International Foundation'' for children of Government schools near the Solur LPG Plant in Bangalore. Through the project, hands-on science education is being imparted to poor rural children and teachers. The program is holistically designed to spark creative thinking and problem-solving skills, improve learning and expand opportunities. Through this project, BPCL aims to reach out to 10,000 children.

The Digital Literacy and Life Skills project across 40 low income/municipal schools in Mumbai in partnership with Pratham entered its second year, reaching out to 25,000 children. The children, who were otherwise completely unaware of computers, have now been able to grasp and operate computers with ease. There is an enhancement in their confidence and they are also enthused to attend school regularly.

In Nandurbar & Sagar, the pilot project of Read India reaching out to 50,000 children entered its third year. The Computer Assisted Learning Program through which computer education is imparted to children from Government/low income schools has also yielded good results. While the program was started with 11 schools near the LPG bottling plant in Uran (Raigad Dist, Maharashtra) and 10 schools near the LPG bottling plant in Lucknow, the year 2012-13 saw the same being scaled up to 75 schools in Uran and Lucknow. A third party assessment of this project highlighted an increased practical knowledge of computers in children. It also reflected an improvement in Maths and English as a result of activity based learning through computers.

A unique in-house pilot project was launched for the professional development of primary teachers from low income schools. The concept of designing and implementing this program is to empower primary teachers to bring about academic and non-academic growth in students through exposure to hands-on pedagogical concepts delivered through reputed NGOs like Pratham, Shikshangan, Navnirmiti, BNHS etc. The aim of this two year project is to create a pool of highly trained primary teachers, whose teaching methods and approaches would have an impact on the children''s learning levels.

The skill-based intervention programs undertaken in collaboration with NGOs like SEWA in Lucknow and AROH in Loni have enabled a large number of women to earn their livelihood by developing skills in chikankari and zardosi work.

Under Project ''Boond'', BPCL helped in converting 20 villages from ''water scarce to water positive''. Work under Project ''Boond'' is currently on in Karnataka, Andhra Pradesh, Tamil Nadu and Uttar Pradesh.

PROMOTION OF SPORTS

BPCL sportspersons continued to excel in the national as well as international sports arena in various sports disciplines.

PV Sindhu created history by becoming the first Indian woman singles player to win the Bronze medal at the World Badminton Championships. She also won the Gold Medal in the Asian Junior Badminton Championships and the Silver Medal in the India Open Grand Prix. Atanu Das won the Mixed Team Bronze Medal in the World Cup Archery Stage III event. In Table Tennis, Poulomi Ghatak won the Gold Medal in the Iran Open, Silver Medal in the Swedish Open & Bronze Medal in the Egypt Open. Soumyajit Ghosh became the youngest player to win the Senior National Table Tennis Championships. He also clinched the Under-21 Men''s title in the ITTF World Tour Brazil Open. He and Sanil Shetty represented India in the Asian and World Table Tennis championships in 2012. Hockey player Birendra Lakra represented India in the Champions trophy and Asian Champions Trophy tournaments. Chess Grand Masters Abhijeet Gupta, P Harikrishna & Parimarjan Negi were members of the Indian team which won the Silver Medal in the Asian Team Chess Championship. They also represented India in the World Team Chess Championship. Abhijeet Gupta also won Gold Medals in the Philadelphia and Kavala Open Chess tournaments. Harikrishna won the Silver Medal in the Asian Blitz Chess Championship. Parimarjan won the Gold Medal in the Asian Individual Chess Championship. In Billiards, Devendra Joshi won the Bronze Medal in the Asian Billiards Championships. He also represented the country in the World Billiards Championship. Manan Chandra won the National Snooker Championship. In Bridge, Marianne Karmarkar was a member of the Ladies team that represented India in the World Bridge Games in 2012. The team also won the Silver Medal in the Asia & Middle East Championships in 2013. BPCL also bagged the Second Runners-up "President''s Trophy" of Petroleum Sports Promotion Board (PSPB) during the year.

In the Physically Challenged Category, Joby Mathew won several Gold/ Silver Medals in the World Arm Wrestling Championship and a Gold Medal in the Paralympics National Badminton Championships.

RESERVATION AND OTHER WELFARE MEASURES FOR SCHEDULED CASTES/SCHEDULED TRIBES/ OTHER BACKWARD CLASSES AND PERSONS WITH DISABILITIES

BPCL has been following in letter and spirit, the Presidential Directives and other guidelines issued from time to time by Ministry of Petroleum & Natural Gas, Ministry of Social Justice and Empowerment and the Department of Public Enterprises relating to reservations/concessions for Scheduled Castes/ Scheduled Tribes/Other Backward Classes.

An adequate monitoring mechanism has been put in place for sustained and effective compliance uniformly across the Corporation. Rosters are maintained as per the Directives and are regularly inspected by the Liaison Officer of the Corporation, as well as the Liaison Officer of Ministry of Petroleum & Natural Gas to ensure proper compliance of the Directives.

SC/ST and economically backward students are encouraged by awarding scholarships to students pursuing courses at Industrial Training Institutes and Secondary School education up to graduation level.

BPCL also complies with provisions under "The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation), Act 1995" relating to providing employment opportunities for Persons with Disabilities (PWDs).

Details relating to representation/appointment of SC/ST/ OBC candidates and Persons with Disabilities are enclosed as Annexure D.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Official Language Implementation Committees continued to function at the Corporate, Regional, Refinery and major location levels, to take decisions based on the annual program issued by Ministry of Home Affairs, besides the provisions of the Official Language Act and Rules. These Committees perform the task of reviewing the progress made in Official Language implementation on a quarterly basis.

The First Sub-Committee of the Parliamentary Committee on Official Language inspected select offices and appreciated the overall work done so far in regard to Official Language implementation. Senior officers from the Ministry of Petroleum & Natural Gas also inspected some of the offices and reviewed the Hindi Implementation. The Corporation''s website is made available in Hindi also and is updated as and when updation takes place in English. Unlimited license for Hindi Software, ISM V6 Office by CDAC, Pune was procured and loaded in the computers of all BPCL offices across the country with Unicode features. A web page has been created for helping in the installation/training of Hindi ISM V6. Similarly, Indic language software is also being loaded on an all India basis. Important manuals were made bilingual and most publicity material was prepared in bilingual. Competitions and cultural programs were organized at various locations all over the country, on the occasion of Hindi Fortnight which was celebrated from 14th-28th September, 2012. In order to encourage the children of staff, cash awards were given on securing 60% and above in Hindi subject in the 10th and 12th Standard exams. BPCL''s House Journal and Newsletter continue to be released in bilingual, whereas a major portion of our media advertisements were released in Hindi. World Hindi Day was celebrated on 10th January, 2013 at all the Regions/Refineries. The Hindi special issue of Petro Plus was awarded the Third Prize by the Mumbai Town Official Language Implementation Committee. Kochi Refinery won the "Best House Magazine Trophy" (First Prize) and the "Rajbhasha Rolling Trophy" (Second Prize) for the year 2011-12. These awards are instituted by the Kochi Town Official Language Implementation Committee (PSUs) for the best Hindi House Magazine published and best implementation of Official Language among the PSUs situated in Kochi.

CITIZENS'' CHARTER AND GRIEVANCE REDRESSAL

In order to facilitate consumers in understanding the touch points and processes on marketing of petroleum products by BPCL, the Citizens'' Charter is published on the corporate website and is updated dynamically with the changes in the guidelines and market scenario. It broadly covers all aspects of products being marketed by BPCL along with customer''s rights like standard, quality, time frame for service delivery, grievance redressal mechanism etc. It also details the guidelines and procedure for selection of dealers and distributors, which ensures transparency and works as a knowledge management tool in educating and communicating with the customer.

A well established system for Grievance Redressal is in place at various consumer touch points. The State Coordinators in the various States and Union Territories and all Territory Managers of Retail and LPG businesses act as Nodal Officers for personal hearing in solving the grievances of customers. An internet based online Grievance Redressal Mechanism (Centralised Public Grievance Redressal and Monitoring System) of Government of India is helping in speedy redressal of grievances. A link to this site is available on the BPCL website. Also, the toll free numbers are available to the customer, so that they can call on these numbers from anywhere in the country for registering complaints/suggestions.

The Right to Information (RTI) Act 2005 has been implemented in BPCL since its inception. People across the organization are familiar with the Act. During the period ending 31st March, 2013, BPCL has provided information to 3984 requests. 88 cases were referred to the Chief Information Commissioner, New Delhi. Decentralization has ensured faster response to information seekers and the team of 84 Central Public Information Officer (CPIOs) and 11 Appellate Authorities have ensured that requisite information is given within the stipulated period.

VIGILANCE

The Vigilance function in BPCL continued its efforts to promote growth of business while maintaining the highest level of ethical standards in the organisation. The Vigilance entity continues to remain a key component of the overall Corporate Governance structure in BPCL. Towards this end, the Vigilance team continued to focus on proactive and preventive measures to promote good and transparent business practices across the Company.

Vigilance has worked closely with the Businesses and helped them identify vulnerable areas in existing procedures in major processes like bill payment, dealer/distributor selection, reconstitution of dealership/distributorship etc. The Information System infrastructure has been leveraged to put in place good practices like e-tendering, e-payments etc.

During the year, Corporate Vigilance enhanced a wide range of awareness initiatives like "Vendor Meets," which were conducted to get inputs from important stakeholders. Workshops and seminars were conducted, enabling the concerned officers to have a thorough understanding of guidelines and procedures. These workshops were conducted with teams in the Refineries, Retail, LPG, Engineering & Projects and Finance. This has also helped in bringing about improvements in the relevant processes. Vigilance Officers, during their visits to different company locations, provided guidance and clarifications to the officers on operational aspects of circulars and guidelines issued by the Central Vigilance Commission (CVC) and Ministry of Petroleum & Natural Gas (MOP&NG).

Surprise inspections were conducted at select company locations, retail outlets, LPG distributorships etc. Inspections of major projects/works/procurement were also undertaken and observations with specific recommendations were advised to the concerned departments. Detailed studies were carried out on key systems in the organisation and findings were shared with the concerned roleholders with a view to initiate remedial action.

Corporate Vigilance also conducted detailed investigation into Complaints and Source Information. Complaints, including online complaints, were received and were investigated directly by the Vigilance function and through the Businesses/Entities. In matters referred by CVC and MOP&NG, necessary investigations were carried out and recommendations were given within the prescribed time frame. Vigilance Officers were deputed for Training Programs conducted by the Central Bureau of Investigation Training Academy and other Training Institutions.

The Vigilance Awareness Week was observed across the Company from 29th October to 3rd November, 2012 with the theme of "Transparency in Public Procurement." The third issue of the vigilance journal "Vigilance Plus" was released and received excellent feedback. Slogan/ Essay/Quiz competitions were conducted for employees and school children.

Corporate Vigilance continued its initiative on "Integrity Clubs" (ICs) to instill ethical values in school children and transform them into valuable change agents in civil society. The first "Integrity Club" which was started at Kochi Refinery School has now been extended to eight schools under Kendriya Vidyalaya Sangathan in Kerala. The activities of the Integrity Clubs at Kochi Refinery have been well received by all.

To increase transparency in interface with vendors, contractors, suppliers and service providers, tenders are being posted on the Central Public Procurement (CPP) portal in the Government of India website. The Integrity Pact has been implemented and is mandatory for all tenders having a contract value of more than Rs. 1 crore. Regular meetings are also held by the Independent External Monitors (IEMs) with the top level management.

SUBSIDIARY COMPANIES

Numaligarh Refinery Limited (NRL)

NRL was incorporated in 1993 with an authorized capital of Rs. 1000 crores. The Company had commissioned a 3 MMTPA refinery at Numaligarh in Assam. NRL was conferred the status of ''Category-I'' Miniratna PSU in the year 2003. As on 31st March, 2013, BPCL holds 61.65% of the paid up equity in NRL.

During the year 2012-13, the Numaligarh refinery achieved a throughput of 2.48 MMT, as against 2.82 MMT in 2011-12. This represents a capacity utilization of 82.7%, as compared to 94% in the previous year. The lower throughput during the year is mainly due to lower crude receipt of 2.45 MMT, as compared to 2.82 MMT received in 2011-12. The refinery achieved a distillate yield of 91.11% and Specific Energy Consumption (SEC) of 59.7 MBN. NRLs distillate yield continues to be the highest amongst the public sector refineries in the country. NRLs GRM in 2012-13 stood at USD 10.52 per barrel, as compared to USD 12.45 per barrel in 2011-12. The overall gross margin for the refinery in 2012-13 amounted to Rs. 1,040.09 crores, as against Rs. 1,235.33 crores in 2011-12.

NRL registered a sales turnover of Rs. 8,752.88 crores for the financial year ending 31st March, 2013, as compared to Rs. 14,067.86 crores in the previous year. Sales turnover during 2012-13 was lower compared to that of the previous year, due to lower sales volume and lesser realization from product sales to BPCL. A portion of the discount on crude oil from upstream companies to BPCL, as a part of the subsidy sharing mechanism put in place by the Government of India, is routed through NRL. This is reflected in the lower prices of finished product sold by NRL to BPCL, which has contributed to the lower sales turnover during the year.

NRLs profit after tax for 2012-13 was Rs. 144.26 crores, as againstRs. 183.70 crores in the previous year. The reduction in profit was mainly due to lower crude throughput.

Earnings per share (EPS) for the year 2012-13 was Rs. 1.96, as compared to Rs. 2.50 in 2011-12. The Board of Directors of NRL has recommended a dividend of Rs. 1.00 per share of Rs. 10.00 each for 2012-13 in line with the previous year.

NRLs net worth as on 31st March 2013 increased to Rs. 2,757.45 crores from Rs. 2,699.25 crores in the previous year. NRLs book value per share as on 31st March 2013 rose to Rs. 37.48 from Rs. 36.69 as on 31st March, 2012.

Bharat PetroResources Limited (BPRL)

BPRL was incorporated in the year 2006 as a wholly owned subsidiary company of BPCL with the objective of implementing BPCL''s plans in the upstream exploration and production sector. As on 31st March 2013, the authorized capital of BPRL is Rs. 3,000 crores and the subscribed and paid up share capital of BPRL is Rs. 2,370 crores. The exploration and production activities of BPRL and its subsidiary companies extend to 25 blocks worldwide, which are in various stages of exploration/ appraisal. Of this, 11 blocks are in India and 14 are abroad. Besides India, BPRL has Participating Interests (PI) in blocks in Australia, Brazil, East Timor, Indonesia, and Mozambique.

BPRL manages many of its overseas projects through subsidiary companies. In 2006, BPRL had formed a wholly owned subsidiary company, Bharat PetroResources JPDA Limited, through which it holds a PI of 20% in Block-JPDA 06-103, in East Timor in the Joint Petroleum Development Area (between Australia and East Timor). Further, BPRL has incorporated a wholly owned subsidiary company, BPRL International BV, in the Netherlands which in turn has three wholly owned subsidiary companies viz. BPRL Ventures BV, BPRL Ventures Mozambique BV and BPRL Ventures Indonesia BV. BPRL Ventures BV has a 50% stake in IBV Brasil Petroleo Limitada, which has participating interests ranging from 20% to 40% in 10 blocks in offshore Brazil. BPRL Ventures Mozambique BV has participating interest of 10% in a block in Mozambique, and BPRL Ventures Indonesia BV holds participating interest of 12.5% in a block in Indonesia.

All the blocks of BPRL are under various stages of exploration/appraisal. BPRL has recorded income of Rs. 1.38 crores and a consolidated loss of Rs. 664.09 crores for the financial year ending 31st March, 2013. The loss was mainly due to interest charges, operators G&A expenditures and relinquishment of participating interest in few blocks in India, Australia & the United Kingdom in view of poor prospectivity assessed, based on drilling results.

Annual Accounts of the Subsidiary Companies

In view of the dispensation granted by the Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8th February, 2011, copies of the Balance Sheet, Profit and Loss Account, Directors'' Report and the Auditors'' Report of the Subsidiary Companies are not attached to the Balance Sheet of the Company. In compliance with the conditions of the dispensation, the Consolidated Financial Statements have been presented in the Annual Report and financial information of the Company''s subsidiaries, as required, is disclosed in the Annual Report as Annexure F to the Directors'' Report for information. The audited Annual Accounts of Subsidiary Companies and related detailed information are open for inspection to Members at BPCL''s Registered Office. Further, BPCL would make available/furnish these documents, on request, to any of its Members and the said documents would also be posted on BPCL''s website.

JOINT VENTURE COMPANIES

Bharat Oman Refineries Limited (BORL)

BORL, promoted by BPCL with equity participation from Oman Oil Company, S.A.O.C. (OOC) has commenced operations of its 6 MMTPA grass roots refinery at Bina. As on 31st March 2013, both BPCL and OOC have an equity stake of 50% each in BORLs paid up share capital of Rs. 1,777.23 crores. BPCL has subscribed to 78.61 crores warrants at a cost of Rs. 935.68 crores. Each warrant represents the right to subscribe to one equity share of face value of Rs. 10 each at a later date. In addition, during the year 2012-13, BPCL subscribed to 36.11 crores warrants at a cost of Rs. 650 crores with the warrants carrying right to subscribe, at a later date, for such number of equity shares of face value of Rs. 10 each or zero coupon compulsorily convertible security compulsorily convertible into equity shares, arrived at the prescribed conversion ratio. BPCL has also given an unsecured loan of Rs. 1,354.10 crores. Till the time the total equity of BORL is tied up, BPCL and OOC will each hold 50% shares in BORL. Also, the state of Madhya Pradesh has a stake in BORL and has subscribed 2.69 crores warrants representing the right to subscribe to 2.69 crores of equity shares of face value of Rs. 10 each at a later date. It is expected that BPCL and OOC will ultimately hold 49% and 26% respectively in the fully diluted equity of BORL.

Bina Refinery, after commencement of its integrated operations in June 2011, stabilised its operations during the year 2012-13 and all plants were tested individually for more than 100% capacity utilization. During the year 2012-13, which was the first full year of operations, the refinery recorded a crude intake of 5.7 MMT at an overall capacity utilization of 96%. The Refinery''s GRM for the year 2012-13 stood at USD 9.1 per barrel with an overall gross margin of Rs. 2,046 crores.

BORL recorded a sales turnover of Rs. 28,142.67 crores in the financial year 2012-13. The net loss for the year stood at Rs. 247.86 crores, as compared to Rs. 1,115.94 crores in the previous year.

Petronet LNG Limited (PLL)

PLL was formed in April, 1998 for importing LNG and setting up LNG terminals with facilities like jetty, storage, regasification etc. to supply natural gas to various industries in the country. The Company has an authorised capital of Rs. 1,200 crore and paid up capital of Rs. 750 crores. PLL was promoted by four public sector companies viz. BPCL, Indian Oil Corporation (IOC), Oil and Natural Gas Corporation Limited (ONGC) and GAIL (India) Limited (GAIL). Each of the promoters holds 12.5% of the equity capital of the company. PLL is a listed company with the public holding 34.80% of the paid up share capital of the company. BPCLs equity investment in PLL currently stands at Rs. 98.75 crores. As at 31st March, 2013, PLL had net worth of Rs. 4,449.69 crores with a book value of Rs. 59.33 per share.

PLL recorded a sales turnover of Rs. 31,467.44 crores in the financial year ended as on 31st March, 2013, as compared to Rs. 22,695.86 recorded in 2011-12. The net profit for the year stood at Rs. 1,149.28 crores, as compared to Rs. 1,057.54 crores in the previous year. The earnings per share for the year 2012-13 amounted to Rs. 15.32 as compared to Rs. 14.10 in 2011-12. PLL has declared dividend of Rs. 2.50 per share for the financial year 2012-13, the same as in the previous year.

Indraprastha Gas Limited (IGL)

IGL, a Joint Venture Company with GAIL as the other co-promoter, was set up in December, 1998 with an authorised capital of Rs. 220 crores for implementing the project for supply of Compressed Natural Gas (CNG) to the household and automobile sectors in Delhi. The paid up share capital of the Company is Rs. 140 crores. BPCL invested Rs. 31.50 crores in IGL for 22.5% stake in its equity. A listed company, IGL has commissioned over 282 CNG stations which supply the environment friendly fuel to more than 6,75,000 vehicles. IGL has more than 3,75,000 domestic PNG customers and over 922 commercial customers in Delhi. The Company is also extending its business to Greater Noida and Ghaziabad. Recently, IGL has acquired 50% of the equity held by financial institutions in Central UP Gas Limited (CUGL), a Joint Venture Company promoted by BPCL and GAIL.

IGL has registered a turnover of Rs. 3,724.06 crores and a profit after tax of Rs. 354.13 crores for the financial year ending as on 31st March, 2013, as compared to a turnover of Rs. 2,790.10 crores and a profit after tax of Rs. 306.43 crores in the previous year. IGL has declared a dividend of Rs. 5.50 per share, against a dividend of Rs. 5.00 per share in the previous year. iGls net worth was Rs. 1,492.99 crores with a book value of Rs. 106.64 per share as at 31st March, 2013. The Petroleum and Natural Gas Regulatory Board (PNGRB) had determined the per unit network tariff and compression charge for IGLs CGD Network and made it applicable with retrospective effect from 01.04.2008. IGL had filed a writ petition against the order of PNGRB before the Hon''ble Delhi High Court. The Court had quashed the order holding that the PNGRB is not empowered to fix any component of network tariff or compression charge. PNGRB has filed a special leave petition before the Hon''ble Supreme Court of India against the order of the Hon''ble High Court of Delhi and the matter is still pending in the Hon''ble Supreme Court. The outcome of the appeal could have an impact on the financials of the Company.

Sabarmati Gas Limited (SGL)

SGL, a Joint Venture Company promoted by BPCL and Gujarat State Petroleum Corporation (GSPC), was incorporated on 6th June 2006 with an authorised capital of Rs. 100 crores for implementing the City Gas distribution project for supply of CNG to the household and automobile sectors in Gandhinagar, Mehsana and Sabarkantha Districts of Gujarat. The paid up share capital of the Company is Rs. 20 crores.

Both the promoters have a stake of 25% each in the equity capital of SGL and the balance has been subscribed to by financial institutions. SGL has set up 20 CNG stations. SGL has achieved a turnover of Rs. 881.55 crores and loss of Rs. 34.27 crores for the financial year ending 31st March, 2013, as against a turnover of Rs. 704.57 crores and profit after tax of Rs. 7.51 crores in the previous year. The Company has not proposed dividend on equity shares for the financial year ending 31st March, 2013, as against Rs. 1.50 per equity share declared in the previous year.

Central UP Gas Limited (CUGL)

CUGL is a Joint Venture Company set up in March, 2005 with GAIL as the other partner for implementing the project for supply of CNG to the household, industrial and automobile sectors in Kanpur and Bareilly in Uttar Pradesh. The authorised and paid up share capital of the Company is Rs. 60 crores. The joint venture partners have each invested Rs. 15 crores in the joint venture, with each partner having an equity stake of 25% in the company. The balance equity share capital had been subscribed to by the financial institutions viz. IDFC Private Equity, Asian Development Bank (ADB) and a subsidiary of IL&FS Investment Managers. The financial institutions have sold their stake in the month of June 2013 to Indraprastha Gas Ltd., which now holds 50% of CUGLs equity. CUGL has set up 12 CNG stations and is carrying on PNG operations.

CUGL has achieved a turnover of Rs. 161.15 crores and profit of Rs. 20.98 crores for the financial year ending 31st March, 2013, as compared to a turnover of Rs. 124.71 crores and a profit of Rs. 21.12 crores in the previous year. The EPS for the year stood at Rs. 3.50 as against Rs. 3.52 in 2011-12. The Board of Directors has recommended the payment of final dividend at Rs. 0.35 per share in addition to the payment of interim dividend of Rs. 0.90 per share in June 2013 for the current year, as against Rs. 1.25 per share for the previous year.

Maharashtra Natural Gas Limited (MNGL)

MNGL was set up on 13th January 2006 as a Joint Venture Company with GAIL for implementing the project for supply of CNG to the household, industrial and automobile sectors in Pune and its nearby areas. The Company was incorporated with an authorised share capital of Rs. 100 crores. The paid up share capital of the Company is Rs. 95 crores. BPCL and GAIL have invested Rs. 22.50 crores each in MNGLs equity capital. The Maharashtra Government provisionally agreed to hold a 5% stake in the Company. The balance equity shares have been subscribed by IDFC Private Equity, ILFS and Axis Bank. The Company has set up 17 CNG stations in the financial year 2012-13.

MNGL has achieved a turnover of Rs. 199.31 crores for the financial year ending 31st March, 2013 and profit of Rs. 35.41 crores for the year, as against a turnover of Rs. 85.99 crores and profit of Rs. 10.74 crore in the previous year. The MNGL Board has proposed a dividend of Rs. 0.80 per equity share for the financial year ending 31st March 2013, as against Rs. 0.30 per equity share declared in the previous year.

Bharat Stars Services Private Limited (BSSPL)

BSSPL, a Joint Venture Company promoted by BPCL and ST Airport Pte Limited, Singapore was incorporated on 13th September, 2007 for providing into-plane fuelling services at the new Bengaluru International Airport. The Company was incorporated with an authorised share capital of Rs. 20 crores. The paid up share capital of BSSPL is Rs. 20 crores.

The two promoters have each subscribed to 50% of the equity share capital of BSSPL and BPCL''s present investment stands at Rs. 10 crores. The Company, which commenced its operations at the new international airport in Bengaluru from May, 2008 has also incorporated a wholly owned subsidiary for implementing into-plane fuelling services at the new T3 Terminal of Delhi International Airport. The Company is also planning to enter Calicut Airport and other nearby airports.

BSSPL has achieved a turnover of Rs. 11.69 crores for the financial year ending 31st March, 2013 and profit of Rs. 1.95 crores, as against a turnover of Rs. 10.38 crores and a profit of Rs. 1.50 crores in the previous year. The Board has recommended a dividend of Rs. 0.25 per equity share for the financial year ending 31st March, 2013, as against Rs. 0.20 per equity share declared in the previous year.

Bharat Renewable Energy Limited (BREL)

BREL was incorporated on 17th June, 2008 for undertaking the production, procurement, cultivation and plantation of horticulture crops such as Karanj, Jathropha and Pongamia, trading, research and development and management of all crops and plantation including Bio-fuels in the State of Uttar Pradesh, with an authorized capital of Rs. 30 crores. The Company has been promoted by BPCL with Nandan Cleantec Limited (erstwhile Nandan Biomatrix Limited), Hyderabad and the Shapoorji Pallonji group, through their affiliate SP Agri Management Services Private Limited. Each of the partners has an equal stake in the equity capital of the joint venture. The project envisages plantation of Jathropha in 1 million acres (4,04,686 hectares) of marginal land, which has the potential of generating employment/self employment for 1 million people and producing 1 million tonnes of Bio-diesel with an investment of Rs. 2,200 crores over the next 10-15 years.

The Government of Uttar Pradesh has approved the project under "Jeevan Jyoti," a scheme of the Government which has the benefit of release of funds under the Mahatma Gandhi National Rural Employment Guarantee (MGNREG) scheme.

BREL has recorded a turnover of Rs. 0.41 crores for the financial year ending 31st March, 2013 and incurred a loss of Rs. 2.13 crores, as against a miscellaneous income of Rs. 0.05 crores and a loss of Rs. 1.85 crores in the previous year.

The Shapoorji Pallonji group has recently indicated their intention to exit the joint venture and have offered their holdings to the existing promoters in the proportion of their current shareholding.

Matrix Bharat Pte Limited (MBPL)

MBPL is a Joint Venture Company incorporated in Singapore on 20th May, 2008 for carrying on the bunkering business and supply of marine lubricants in the Singapore market, as well as international bunkering including expanding into Asian and Middle East markets. The Company has been promoted by BPCL and Matrix Marine Fuels LP USA, an affiliate of the Mabanaft group of companies, Hamburg, Germany. The authorised capital of the Company is USD 4 million, which is equivalent to Rs. 20 crores. Both the partners have contributed equally to the share capital. Matrix Marine Fuels LP USA has subsequently transferred their share and interest in the joint venture in favour of Matrix Marine Fuels Pte Limited, Singapore another affiliate of the Mabanaft group. The Company was previously known as Matrix Bharat Marine Services Pte Limited before it was changed to Matrix Bharat Pte Limited.

MBPL has achieved a turnover of USD 566.97 Million and incurred loss of USD 3.98 Million for the year ending 31.12.2012, as compared to a turnover of USD 928.71 Million and a profit of USD 0.33 Million in the previous year.

Petronet India Limited (PIL)

BPCL has 16% equity participation with an investment of Rs. 16 crores in PIL, which was formed as a non-government financial holding company for the development of pipeline network throughout the country. PIL has facilitated pipeline access on a common carrier principle through joint ventures for pipelines put up by them viz. Vadinar- Kandla, Kochi-Coimbatore-Karur and Mangalore-Hassan- Bangalore. PIL registered an income of Rs. 0.26 crores and a net loss of Rs. 0.09 crores for the financial year ending 31st March, 2013, as against an income of Rs. 0.23 crores and a net loss of Rs. 0.25 crores in the previous year.

The new pipeline policy announced by the Government of India some time back has affected the future of the company, as interested companies are permitted to undertake pipeline projects and PIL does not have any new projects in hand. As such, promoters and other investors in PIL have reached a conclusion that continuation of PIL would not be viable. Accordingly, the winding up process has been initiated and the process of divesting PILs 26% equity in the three joint venture companies promoted by it is in progress. The Board of Directors of BPCL, in its meeting held in December 2006, accepted PILs offer to buy 26% stake in the equity of Petronet CCK Limited where BPCL already holds 49% of the paid up share capital. This is awaiting receipt of approval of the Government of India.

Petronet CCK Limited (PCCKL)

BPCL has invested a sum of Rs. 49 crores for a 49% stake in the equity capital of PCCKL, a Joint Venture Company promoted with PIL with an authorised capital of Rs. 135 crores. The paid up share capital of the Company is Rs. 100 crores. The Company owns the 292 km long multi-product Kochi-Karur pipeline from BPCL''s installation at Irimpanam to Karur for transportation of MS, HSD and SKO. The pipeline commenced commercial operations from September, 2002.

The pumping volume during the year 2012-13 amounted to 2.60 MMT, as against 2.21 MMT in the previous year. PCCKL registered a turnover of Rs. 101.59 crores and loss of Rs. 18.83 crores for the financial year ending 31st March, 2013, as compared to a turnover of Rs. 69.50 crores and net profit of Rs. 20.34 crores in the previous year. BPCL has initiated steps subject to completion of all formalities to purchase the 26% share of PIL in PCCKL.

Delhi Aviation Fuel Facility Private Limited (DAFFPL)

A Joint Venture Company, Delhi Aviation Fuel Facility Private Limited was promoted by BPCL, IOC and Delhi International Airport Limited (DIAL) for implementing Aviation Fuel facility for the T3 terminal at Delhi International Airport. The paid up share capital of the Company is Rs. 164 crores. BPCL and IOC have subscribed to 37% of the share capital of the Joint Venture, while the balance has been taken by DIAL. BPCL''s onsite assets at the Delhi Airport were transferred to the Joint Venture. DAFFPL has registered a turnover of Rs. 95.36 crores and net profit of Rs. 29.63 crores for the financial year ending 31st March, 2013, as against a turnover of Rs.122.75 crores and net profit of Rs. 35.91 in the previous year. The Company has proposed a dividend ofRs. 1.20 per equity share for the financial year ending 31st March, 2013, as against Rs. 2.50 per equity share declared in the previous year.

Kannur International Airport Limited (KIAL)

The Government of Kerala has promoted KIAL as a public limited company to establish, operate, manage, undertake and maintain airports and allied infrastructure facilities at Kannur and/or other parts of India and to provide other services, either individually or in association with other undertakings or companies in India or abroad. To start with, KIAL would set up an Airport at Kannur in the state of Kerala at an estimated project cost of Rs. 1,414 crores, of which Rs. 784 crores will be financed through equity and the balance sum of Rs. 630 crores will be financed by way of borrowings.

BPCL has signed an MOU with KIAL for building a new Airport at Kannur. The Board has approved the proposal for BPCL to invest Rs. 170 crores for 21.68% equity stake in the Company. Of this, BPCL has made an initial equity contribution of Rs. 40 crores.

GSPL India Transco Limited

BPCL has signed a Joint Venture Agreement in April, 2012 with Gujarat State Petronet Ltd., IOC and HPCL for laying the Mehsana-Bhatinda (MBPL) and Bhatinda- Jammu-Srinagar (BJSPL) gas pipelines. GSPL India Transco Limited will be executing the project and BPCL will contribute 11% of the total equity of the Company. The balance will be contributed by GSPL (52%), iOc (26%) and HPCL (11%).

BPCL has made the initial equity contribution of Rs. 7.70 crores. This being the first year of operations, GSPL India Transco Limited earned a miscellaneous income of Rs. 1.23 crores and net profit of Rs. 0.83 crores for the financial year ending 31st March, 2013.

GSPL India Gasnet Limited

BPCL has signed a Joint Venture Agreement on 30th April, 2012 with Gujarat State Petronet Ltd., IOC and HPCL for laying the Mallavaram-Bhopal-Bhilwara-Vijaipur(MBBVPL) gas pipeline. GSPL India Gasnet Limited will be executing the project and BPCL will contribute 11% of the Company''s total equity capital. The balance will be contributed by GSPL (52%), IOC (26%) and HPCL (11%).

BPCL has made the initial equity contribution of Rs. 8.47 crores. This is the first year of operations of GSPL India Gasnet Limited and the Company earned a miscellaneous income of Rs. 0.95 crores and net profit of Rs. 0.65 crores for the financial year ending 31st March, 2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The details regarding energy conservation, technology absorption and foreign exchange used and earned as required by Section 217(1 )(e) of the Companies Act, 1956, are given in Annexure A.

MEMORANDUM OF UNDERSTANDING WITH MINISTRY OF PETROLEUM & NATURAL GAS

BPCL, for the 24th successive year, has entered into a Memorandum of Understanding (MOU) for the year 2013-14 with the Ministry of Petroleum & Natural Gas. BPCL has been achieving an "Excellent" performance rating since 1990-91.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)

Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is enclosed as Annexure C.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement and Department of Public Enterprises (DPE) Guidelines, the Report on Corporate Governance, together with the Auditors'' Certificate on compliance of Corporate Governance, is annexed as Annexure B. The Report indicates the extent of compliance of the Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs.

The Company has engaged M/s. Dholakia & Associates, Company Secretaries for conducting the Secretarial Audit for the year 2012-13. The Secretarial Audit Report is enclosed as part of Annexure B.

Management Discussion and Analysis Report (MD&A) forms part of the Annual Report. The forward looking statements made in MD&A are based on certain assumptions and expectations of future events. The Directors cannot guarantee that these assumptions are accurate or these expectations will materialize.

SOCIAL, ENVIRONMENTAL AND ECONOMIC RESPONSIBILITIES

BPCL is committed to be a responsible corporate citizen in society, which leads to sustainable growth and economic development for the nation as well as all stakeholders. In order to be a responsible business to meet its commitment, the Board of Directors of the Company has delegated to ''CSR and Sustainability Committee'', review of the Business Responsibility Policies based on the principles of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business as issued by the Ministry of Corporate Affairs, Government of India. In line with the same and Clause 55 of the Listing Agreement, Business Responsibility Report is forming part of the Annual Report. This Report is in addition to BPCLs Sustainability Reporting in accordance with the Global Reporting Initiative (GRI).

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of BPCL confirm that:

1) In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

2) The Company has selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as on 31st March 2013 and of the Statement of Profit and Loss of the Company for the year ended on that date.

3) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4) These Accounts have been prepared on a going concern basis.

DIRECTORS

Prof. J. R. Varma, Shri B. Chakrabarti and Shri R. N. Choubey were appointed as Additional Directors on 10.08.2012. The shareholders have appointed them as Directors of the Company at the Annual General Meeting held on 21.09.2012.

Shri Alkesh Kumar Sharma, Secretary (IP), Government of Kerala resigned from the Board with effect from 12.10.2012. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company''s business.

Prof. S. K. Barua and Prof. N. Venkiteswaran resigned from the Board of Directors with effect from 23.11.2012. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by them for the development and progress of the Company''s business.

Shri Tom Jose, Managing Director, Kerala State Industrial Development Corporation was appointed as Additional Director on the Board with effect from 24.01.2013. As he has been appointed as Additional Director, he will hold office till the ensuing Annual General Meeting. Notice under Section 257 of the Companies Act, 1956 has been received from a Member proposing his name for appointment as Director at the ensuing Annual General Meeting.

Shri H. M. Jagtiani and Shri I. P S. Anand resigned from the Board with effect from 6.03.2013 and 15.03.2013 respectively. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by them for the development and progress of the Company''s business.

Shri R. N. Choubey, Director General, Directorate General of Hydrocarbons, Ministry of Petroleum & Natural Gas resigned from the Board with effect from 10.04.2013. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company''s business.

Dr. Neeraj Mittal, Joint Secretary (Marketing), Ministry of Petroleum & Natural Gas was appointed as Additional Director with effect from 11.04.2013. As he has been appointed as Additional Director, he will hold office till the ensuing Annual General Meeting. Notice under Section 257 of the Companies Act, 1956 has been received from a Member proposing his name for appointment as Director at the ensuing Annual General Meeting.

Shri K. K. Gupta and Shri B. K. Datta, Directors, will retire by rotation at the ensuing Annual General Meeting as per the provisions of Section 256 of the Companies Act, 1956, and being eligible, offer themselves for re-appointment as Directors at the said Meeting.

As required under the Corporate Governance Clause, brief bio-datas of the above Directors who are appointed / re-appointed at the Annual General Meeting are provided in the Corporate Governance Report.

STATUTORY AUDITORS

M/s. T.R. Chadha & Co. Chartered Accountants, Mumbai and M/s. K. Varghese & Co. Chartered Accountants, Kochi, were appointed as Statutory Auditors for the year 2012-13, by the Comptroller & Auditor General of India (C&AG), under the provisions of Section 619 (2) of the Companies Act, 1956. They will hold office till the ensuing Annual General Meeting.

COST AUDITORS

During the year 2012-13, the Cost Audit Report has been filed with the Ministry of Corporate Affairs on 28.01.2013 in XBRL Format as per the requirements of The Companies (Cost Audit Report) Rules, 2011. The due date for filing the Cost Audit Report was 28.02.2013. This Cost Audit Report pertains to the year 2011-12 and the Cost Auditors were m/s. N. I. Mehta & Co., Mumbai and M/s. Muralidhar Mohan & Associates, Mumbai.

For the year 2012-13, M/s. Rohit & Associates, Mumbai & M/s. Musib & Company, Mumbai have been appointed as the Cost Auditors. The due date for filing the Cost Audit Reports for 2012-13 is 30.09.2013, for which necessary action is being taken.

ACKNOWLEDGEMENTS

The excellent performance of the Company in 2012-13 would not have been possible without the sincere efforts and commitment shown by each one of BPCL''s dedicated employees. The Directors would like to record their thanks to the employees for their outstanding performance on all fronts.

The Directors express their gratitude to the support and guidance received from various Ministries of the Government of India, particularly the Ministry of Petroleum & Natural Gas, and from various State Governments which have contributed immensely in BPCL being able to achieve its ambitious targets.

The Directors convey their appreciation for the continuing support and encouragement of each and every stakeholder of BPCL including customers, dealers, distributors, vendors, contractors and other business partners.

Every shareowner has been steadfast in their support for each and every initiative undertaken by the Company. The Directors would like to acknowledge this support and remain committed to working towards further enhancing shareholders'' value.

For and on behalf of the Board of Directors

Sd/-

Mumbai R.K. Singh

Date: 14th August, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors take pleasure in presenting their Report on the performance of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31st March, 2012.

PERFORMANCE OVERVIEW

Group Performance

The aggregate Refinery throughput at BPCLs Refineries at Mumbai and Kochi along with that of its subsidiary company, Numaligarh Refinery Limited (NRL) and Joint Venture Company, Bharat Oman Refineries Limited (BORL) in 2011-12 was 26.72 Million Metric Tonnes (MMT), as compared to 24.03 MMT in the previous year. The market sales of the BPCL Group for the year stood at 31.48 MMT, as compared to 29.58 MMT in 2010-11. The group exported 3.49 MMT of petroleum products during the year as against 2.61 MMT in 2010-11.

The BPCL group recorded a Gross Revenue from Operations of Rs. 2,23,314.64 crores as compared to Rs. 1,66,104.22 crores in 2010-11. The Profit after Tax for the year 2011-12 stood at Rs. 851.28 crores as against Rs. 1,742.06 crores in the previous year. After setting off the minority interest, the Group earnings per share was of the order of Rs. 21.60 in the current year as compared to Rs. 45.22 in 2010-11.

CONSOLIDATED GROUP RESULTS

2011-12 2010-11

Physical Performance

Crude Throughput (MMT) 26.72 24.03

Market Sales (MMT) 31.48 29.58

Financial Performance Rs. Crores

Gross Revenue from Operations 2,23,314.64 1,66,104.22

Less: Excise Duty Paid (11,175.08) (12,339.31)

Net Revenue from Operations 2,12,139.56 1,53,764.97

Gross Profit 6,269.32 5,986.47

Finance Cost 2,259.06 1,265.62

Depreciation & amortization expense 2,410.83 1,891.36

Profit before tax 1,599.43 2,829.49

Provision for taxation - Current (Net of MAT Credit Entitlement) 409.35 820.27

Profit after Current Tax 1,190.08 2,009.22

Provision for taxation - Deferred 331.63 185.09

Short provision for Taxation in earlier years provided for 7.17 82.07

Net Profit 851.28 1,742.06

Minority Interest 70.45 107.10

Net Income of the group attributable to BPCL 780.83 1,634.96

Group Earnings per share attributable to BPCL (Rs.) 21.60 45.22

COMPANY RESULTS

2011-12 2010-11

Physical Performance

Crude Throughput at Mumbai and Kochi Refineries (MMT) 22.91 21.78

Market Sales (MMT) 31.14 29.27

Rs. Crores

Financial Performance

Revenue from Operations - Gross 2,22,500.47 1,63,312.60

Gross Profit before Depreciation, Interest and Tax 5,568.63 5,167.32

Finance Cost 1,799.59 1,117.03

Depreciation & amortization expense 1,884.87 1,655.40

Profit before tax 1,884.17 2,394.89

Provision for Taxation - Current (Net of MAT Credit Entitlement) 178.07 610.24

Provision for Taxation - Deferred 393.01 148.24

Short provision for taxation in earlier years provided for 1.82 89.73

Net Profit 1,311.27 1,546.68

Balance brought forward 500.00 181.06

Amount available for disposal 1,811.27 1,727.74

The Directors propose to appropriate this amount as under:

Towards Dividend:

Final (proposed) Dividend 397.70 506.16

Towards Corporate Dividend Tax 57.16 71.08

For transfer to General Reserve 856.41 650.50

Balance carried to Balance Sheet 500.00 500.00

Summarized Cash Flow Statement :

Cash Flows:

Inflow/(Outflow) from operations 925.84 3,081.87

Inflow/(Outflow) from investing activities (890.54) 1,750.50

Inflow/(Outflow) from financing activities (4,713.14) (1,817.00)

Net increase/(decrease) in cash & cash equivalents (4,677.84) 3,015.37

Company Performance

BPCL's revenue from operations for the year 2011-12 stood at Rs. 2,22,500.47 crores reflecting an increase of 36.24% over the previous year when the Company's revenues from operations amounted to Rs. 1,63,312.60 crores. Sales in volume terms increased from 29.27 MMT in 2010-11 to 31.14 MMT in 2011-12, reflecting an increase of 6.39% over the previous year. The profit before tax for the year was Rs. 1,884.17 crores as compared to Rs. 2,394.89 crores in 2010-11. After providing for tax, (including deferred tax) of Rs. 572.90 crores as against Rs. 848.21 crores during the last year, the profit after tax for the year stood at Rs. 1,311.27 crores as against Rs. 1,546.68 crores recorded in 2010-11.

The Board of Directors has recommended a dividend of 110% (Rs. 11 per share) for the year on the paid-up share capital of Rs. 361.54 crores which will absorb a sum of Rs. 454.86 crores out of the profit after tax inclusive of Rs. 57.16 crores for Corporate Dividend Tax on distributed profits. BPCL's net worth as on 31st March, 2012 stands at Rs. 14,913.86 crores, as compared to Rs. 14,057.62 crores as at the end of the previous year.

The Board of Directors at its meeting held on 25th May, 2012 has recommended for the approval of Shareholders the issue of Bonus Shares in the ratio of 1:1 i.e. one new bonus equity share of Rs.10 each for every one equity share of Rs.10 held by the shareholders by capitalizing the reserves. The issue of Bonus Shares in the ratio of 1:1, has been approved by the Shareholders resulting in capitalisation of a sum of Rs. 361.54 crores. Accordingly the Paid-up Equity Capital of the Company presently stands increased to Rs. 723.08 crores from the pre-bonus level of Rs. 361.54 crores. These Bonus Shares rank pari passu in all respects with the existing shares except that these Bonus Shares shall not be eligible for dividend for the year ended 31st March, 2012.

The earnings per share amounted to Rs. 36.27 in 2011-12 as compared to Rs. 42.78 in 2010-11. Internal cash generation during the year was higher at Rs. 3,134.99 crores as against Rs. 2,759.31 crores in 2010-11. BPCL's contribution to the exchequer by way of taxes and duties during 2011-12 amounted to Rs. 35,994.30 crores, as against Rs. 36,010.08 crores in the previous financial year.

Borrowings from banks increased from Rs. 16,088.57 crores as at 31st March, 2011 to Rs. 20,749.94 crores at the close of the current financial year. Loans from Oil Industry Development Board decreased to Rs. 743.75 crores as at 31st March, 2012 from a level of Rs. 871.75 crores as at the end of the previous year. Debentures worth Rs. 1000 crores issued during the year 2009-10 remained outstanding as on 31st March 2012.

The amount of deposits, matured but unclaimed, at the end of the year was Rs. 0.19 crores, which pertains to 16 depositors.

The total Capital Expenditure during the year 2011-12 amounted to Rs. 2,761.81 crores as compared to Rs. 2,532.20 crores during the year 2010-11.

The Comptroller and Auditor General of India (C&AG) has no comment upon or supplement to the Statutory Auditors' Report on the Accounts for the year ended 31st March, 2012. The letter from C&AG is annexed as Annexure E.

REFINERIES

MUMBAI REFINERY

During the year 2011-12, Mumbai Refinery achieved a throughput of 13.35 MMT of feedstock (crude oil and other feedstock) as against 13.02 MMT achieved in 2010-11. This was the highest throughput ever achieved by the refinery in a single year and represents capacity utilization of 111% as compared to 108% in the previous year.

During the year, the refinery achieved its highest ever production of Aviation Turbine Fuel (ATF), Propylene (C3), Motor Spirit (MS), High Speed Diesel (HSD), Methyl Tertiary Butyl Ether (MTBE), Bitumen, Furnace Oil and Lube Base Oils. Mumbai refinery continued to meet the demand for MS and HSD complying with Euro IV quality norms. Mumbai Refinery also achieved the landmark of cumulative production of Lube Base Oil crossing the 1 million metric tonne mark since the commissioning of the LOBS unit.

The gross refining margin (GRM) for the year stood at USD 3.12 per barrel as compared to USD 4.23 per barrel realized in 2010-11. The overall gross margin for the refinery in 2011-12 amounted to Rs. 1,503 crores as compared to Rs. 1,885 crores in 2010-11. Lower GRM in 2011-12 is due to crude cost variation, increase in octroi cost, abolition of custom duty on imported crude and reduction in duty on finished product, higher export loss and impact of higher prices of Regasified LNG (RLNG).

KOCHI REFINERY

Kochi Refinery achieved a crude throughput of 9.56 MMT during this year as compared to 8.76 MMT in 2010-11. This was the highest throughput ever achieved by the refinery in a single financial year. During the year, the refinery achieved its highest ever production of Liquefied Petroleum Gas (LPG), ATF, C3, MS meeting Euro III standards and Bitumen. The refinery earned a GRM of USD 3.20 per barrel in 2011-12 as against a GRM of USD 4.83 per barrel in 2010-11. This translates into a total GRM of Rs. 1,099 crores as compared to Rs. 1,446 crores in 2010-11. The lower GRM for the year 2011-12 can be attributed to higher export loss and crude and product rate variations. The capacity utilization for the year 2011-12, being the first year of operations after commissioning all the units as part of Capacity Expansion and Modernization Project (CEMP) Phase II, stood at 100.6% as compared to 103.1% achieved in the previous year.

The details of the performance of the Refineries, their activities and future plans are discussed in the Management Discussion and Analysis Report (MD&A).

MERGER OF KRL WITH BPCL As informed in the last year's Report, merger of the erstwhile Kochi Refineries Limited (KRL) with BPCL under Sections 391 to 394 of the Companies Act 1956 had been completed, following receipt of the Order dated 18th August 2006 issued by the Ministry of Company Affairs, New Delhi. One of the Shareholders of the erstwhile KRL had filed a Writ Petition in the Delhi High Court challenging the merger, and the same is pending as on date.

MARKETING

During the year 2011-12, BPCL's market sales volume touched a level of 31.14 MMT, as compared to 29.27 MMT in the previous year. This represents a growth of 6.39% over the previous year. BPCL's market share amongst public sector oil companies stood at 22.40% as at 31st March, 2012 as compared to 22.34% as at the end of the previous year.

A detailed discussion of the performance of the Marketing function is given in the MD&A.

PROJECTS

Central India Refinery Project

Bharat Oman Refineries Limited (BORL), promoted by BPCL and Oman Oil Company (OOC) has commenced operations of its 6 MMTPA grass roots refinery at Bina. BPCL has an equity stake of 50% in BORL, which has a paid up capital of Rs. 1,777.23 crores. BPCL has also given a loan of Rs. 1,354.10 crores and subscribed to 78.61 crores warrants, representing the right to subscribe to 78.61 crores equity shares of Rs. 10 each at a later date at a cost of Rs. 935.68 crores. Till the time the total equity of BORL is tied up, BPCL and OOC will each hold 50% shares in BORL. On a future date, BPCL and OOC will hold 49% and 26% respectively in the fully diluted equity of BORL. The refinery became operational in May 2011. After the initial period of stabilizing its operations, the Bina refinery has started meeting BPCLs product requirements in the northern and central regions of the country. This will help in reducing BPCL's dependence on other oil companies and imports for making available product to meet the demand in these markets. BORL recorded a sales turnover of Rs. 7,551.56 crores in the financial year ended as on 31st March, 2012. During the financial year 2010-11, there was other income of Rs. 12.24 crores. The net loss for the year stood at Rs. 1,115.98 crores as compared to Rs. 66.10 crores in the previous year.

Bina Product Despatch Terminal The Bina Product Despatch Terminal was designed to facilitate the marketing of products from the new BORL refinery at Bina. The despatch terminal was constructed with a tankage of 4.45 lakh kilolitres (Kls) for storing White Oils, 10 bay road loading gantry for White Oils and single spur full rake rail loading gantry for White Oils, 8400 MT LPG mounded storage, 5 bay road loading gantry for LPG, 12 Km long railway siding and other associated infrastructural facilities, adjacent to the Bina refinery. All facilities at the terminal are commissioned and put to use in stages, in synchronization with the receipt of finished products from BORL refinery. Despatches of finished products through road, railway and Bina-Kota cross country pipeline are being done regularly. Bulk LPG Despatches through road are also being done. The Company has despatched 98 TMT of bulk LPG by road, 890 TMT of White Oils by pipeline, 15,572 Kls of White Oils by road and 681 Bogie Type POL tank Wagon (BTPN) rakes of White Oils by rail from Bina Despatch Terminal till date.

The approved cost of the project is Rs. 639.11 crores and the cumulative expenditure as on 30th June, 2012 stood at Rs. 614.78 crores.

Bina Kota Product Pipeline

The project, with an approved cost of Rs. 405.82 crores involved laying of an 18" (45.72 cms) dia. 257 Km long cross-country product pipeline from Bina to Kota, to facilitate the economic evacuation of MS, HSD, SKO and ATF from the Bina refinery. The pipeline is designed for an initial throughput of 2.8 MMTPA and will be connected to the existing multi-product Mumbai-Manmad-Manglia- Piyala-Bijwasan pipeline at Kota to facilitate distribution of products to the markets in northern India. The pipeline was successfully commissioned in synchronization with availability of product from BORL refinery in the month of September 2011. The cumulative expenditure on the project as on 30th June, 2012 stood at Rs. 393.88 crores. Capacity Augmentation of Kota-Piyala Section of MMBPL Pipeline

The project envisages enhancement of capacity of the Kota-Piyala section of the Mumbai-Manmad-Manglia- Piyala-Bijwasan pipeline from 2.8 MMTPA to 4.4 MMTPA, to evacuate products from Bina refinery and also to meet the growing demand for petroleum products in the northern region. The estimated cost of the project is Rs. 152.89 crores. The project has achieved an overall physical progress of 34.7% and is expected to be mechanically completed by June 2013. The cumulative expenditure as on 30th June, 2012 stood at Rs. 7.19 crores.

Kota Jobner Pipeline Project The project envisages laying of a 210 Km long and 14" (35.6 cms) dia. cross-country pipeline from Kota to Jobner (near Jaipur) for economic transportation of MS / SKO / HSD from BPCL's Mumbai Refinery as well as BORLs refinery at Bina. The estimated as-built project cost is Rs. 276.27 crores.

Work on the detailed route survey, soil studies and cadastral surveys for the proposed pipeline route has been completed. The project is expected to be completed within 24 months from receipt of the clearance from the Petroleum & Natural Gas Regulatory Board (PNGRB). The Company has submitted bid to PNGRB in this regard. Integrated Refinery Expansion Project (IREP) at Kochi Refinery

The Integrated Refinery Expansion Project (IREP) at Kochi Refinery envisages increasing the refinery capacity from the present 9.5 MMTPA to 15.5 MMTPA and modernization of the refinery facilities to produce auto fuels conforming to Euro IV / Euro V specifications and upgradation of the residue streams to distillates and Petcoke. The project is estimated to cost around Rs. 14,225 crores. The project will be completed within 42 months from the receipt of environment clearance.

Licensor selection for process units like the Delayed Coker Unit (DCU), VGO Hydro Desulphurisation Unit (VGO HDT) and Diesel Hydro Desulphurisation Unit (DHDT) have been completed. The Fluid Catalytic Cracking Unit (FCCU) Licensor selection activities are in progress. The Design and Engineering Package preparation of these and various open art units by M/s. Engineers India Limited (EIL), the Project Management Consultants, are in progress. Site grading activities are currently in progress at the refinery site.

Continuous Catalytic Regeneration Reformer (CCR) Facilities and Hydrocracker Revamp at Mumbai Refinery

The project has been undertaken to increase the production of Euro III / Euro IV grade MS and HSD at Mumbai Refinery. This involves revamping of the Hydrocracker Unit to increase its capacity from 1.75 MMTPA to 2.0 MMTPA and setting up of a new Continuous Catalytic Regenerator Reformer Unit (CCR) of 1.2 MMTPA capacity with matching new Naphtha Hydro Treater Unit (NHT) and new Pressure Swings Adsorber (PSA) Units and other utilities/offsite facilities at a cost of Rs. 1,827 crores. The project has achieved an overall progress of 73.96% with a cumulative expenditure of Rs. 611.55 crores as on 30th June 2012. The project is expected to be completed by April 2013. The Hydrocracker revamp has been completed with the exception of installation of one reboiler. The Engineering and Procurement activities for the project are nearing completion, the equipment foundation work is completed and construction activities of the Fired Heaters and Regeneration package, fabrication/ erection of piping and equipment erection are in progress.

Replacement of CDU /VDU at Mumbai Refinery The project envisages replacement of old crude distillation and vacuum units by a state-of-the-art integrated Crude and Vacuum Distillation Unit (CDU / VDU) of 6 MMTPA capacity to improve mechanical integrity and enhance safety and the environment. The total project cost is estimated at Rs. 1,419 crores. EIL has been retained as Process Licensor and EPCM Consultant. The process design has already been completed and detailed engineering activities are in progress. The order has been placed for the Crude and Vacuum Column, which are critical items. Tendering activities for Desalters, Heat Exchangers and Vessels are in progress. The scheduled completion of the project is December 2014.

LPG Import Facilities at JNPT with Strategic Storage at Uran

The project envisages the development of Cryogenic LPG import facilities at Jawaharlal Nehru Port Trust (JNPT). The project involves erecting of facilities for unloading of refrigerated LPG, a 12.5 Km long refrigerated transfer pipeline from the JNPT jetty to BPCLs Uran LPG Plant and setting up refrigerated LPG storage in 2 x 8000 MT. The LPG import facility was commissioned during the year on 31st January, 2012. The facility has marine unloading arms of 8" (20.30 cms) dia, having capacity to discharge 500 MT LPG per hour from the ship. This will enable BPCL to import 0.6 MMT LPG per annum. The approved cost of the project is Rs. 304.40 crores while the cumulative expenditure up to 30th June, 2012 was Rs. 273.41 crores.

This is the country's 2nd Cryogenic LPG import facility amongst public sector oil companies after the existing one of IOC at Kandla. This additional import capacity will help in meeting the growing LPG deficit in India. BPCLs LPG terminal at Uran, which is already a hub for LPG handling, will come to play a critical and strategic role in the country in the years to come.

Pipeline for Transfer of LPG from BPCR / HPCR Mumbai to Uran

The project consists of laying a 28 Km pipeline (12 Kms offshore and 16 Kms onshore) and providing 3 x 900 MT Mounded Storage Vessels (MSV) BPCL's Uran LPG plant. The 10" (25.4 cms) dia cross country pipeline is being laid to transfer LPG from the Mumbai refineries of BPCL and Hindustan Petroleum Corporation Limited (HPCL). The pipeline portion of the project costing Rs. 206.81 crores is being undertaken along with HPCL and the cost will be shared equally by the two companies. The cost of MSVs amounting to Rs. 40 crores will be to BPCL's account. The onshore pipeline laying has been completed. Of the 12 Kms offshore pipeline, 10 Kms laying has also been completed. The project has achieved an overall physical progress of 90.5% with cumulative expenditure of Rs. 155.76 crores as on 30th June 2012. The project is expected to be completed by October, 2012. The facility will decongest traffic in and around Chembur in Mumbai and help improve the ambient air quality in Mumbai city, besides savings in transportation cost.

RESEARCH & DEVELOPMENT (R&D)

The Research and Development centres of BPCL consistently follow the current trends of technological advancement across the globe. R&D capabilities at Corporate R&D Centre, Greater Noida, Uttar Pradesh, Product & Application Development Centre, Sewree, Mumbai and the R&D Centre at Kochi Refinery are leveraged towards business growth at all times. BPCL's R&D programmes are discussed separately in the MD&A. Further, the areas covered under R&D and the benefits derived from R&D activities are detailed in Form B of Annexure A to the Directors' Report.

NON-CONVENTIONAL ENERGY INITIATIVES

BPCL has undertaken various initiatives in tapping non-conventional energy sources like bio-diesel, wind energy, solar energy and fuel cells. In this regard, steps are taken to develop non-conventional / renewable resources of energy.

BPCL has been exploring the possibility of promoting green fuels with a view to protecting the environment by reducing pollution and dependency on imported fuels. Aiming for sustainable development, huge tracts of unproductive, barren and non-cultivable land are proposed to be used for the growth of Jatropha and Karanj plants. The plantations would contribute towards environment protection, prevention of soil erosion and provide feedstock for manufacturing bio-diesel.

BPCL is in discussion with various State Governments including Uttar Pradesh, Bihar and Karnataka to set up Bio-Diesel Value Chains in these states.

In the State of Uttar Pradesh, BPCL has initiated action to set-up the Bio-diesel Value Chain which envisages cultivating Bio-fuel plants on wasteland to produce Bio-diesel from the plantation to replace Diesel over a period of time. A Joint Venture Company, M/s. Bharat Renewable Energy Ltd. (BREL) has been incorporated for this project. As on 31st March, 2012, the company has identified waste / arid land of 1,34,722 acres (54,520 hectares) in the State for Bio-fuel plantation.

BREL has submitted an application for release of funds from the Mahatma Gandhi National Rural Employment Guarantee, MGNREG Scheme for Bio-fuel plantation on 37,037 acres (14,988 hectares)of waste / arid land to the Government of Uttar Pradesh. The total plantation covering an area of 7,450 acres (3,014 hectares) of waste land has been completed and further work is in progress for 8,078 acres (3,269 hectares) of land where pit digging has since been completed. During the current year, it completed plantation on 3,890 acres (1,574 hectares) which is more than plantations done in earlier years.

INDUSTRIAL RELATIONS

The overall Industrial Relations climate remained peaceful and cordial throughout the year. Negotiations with the Unions are currently in progress for signing the Long Term Wage Settlement both in Marketing and Refineries. FULFILLMENT OF SOCIAL OBLIGATIONS BPCL continued its focused action in the area of Corporate Social Responsibility (CSR) with thrust in the areas of Education and Water Conservation. Through the various CSR initiatives across the country, BPCL has been able to impact the lives of around 70,000 people. Even as the initiatives started in the earlier years were continued, several new projects were started and partnerships were formalized with reputed Non-Government Organisations (NGOs).

BPCL has, in its Memorandum of Understanding signed with the Ministry of Petroleum & Natural Gas for the year 2011-12, accepted a target of reaching out to 30,000 children for education, 15 villages for Rainwater Harvesting and 200 youth and 300 women for livelihood training. BPCL has been successful in achieving all these targets. In the field of education, BPCL initiated the Digital Literacy and Life Skills project across 40 low income/ Municipal schools in Mumbai in partnership with Pratham, thereby reaching out to 25,000 children. In the districts of Nandurbar and Sagar, the Read India project has entered its second year and is reaching out to 50,000 children. Through Project Computer Assisted Learning (CAL), the Company has been able to reach out to 10,000 children in Uran, Panvel and Lucknow. BPCL was also associated with the Teach for India project in 6 schools in Chembur in Mumbai. A third party assessment of the project has rated it very highly, based on the learning levels acquired by the children. Projects were also initiated for the education of 1050 tribal children in Araku Valley in 3 residential schools in collaboration with Naandi foundation, a NGO working in this field. A project 'WE CAN' was launched as part of the efforts to develop the leadership skills of teachers and Principals from low income and Municipal schools in Mumbai. BPCL also partnered Agastya International Foundation, a NGO in a 'Science on Wheels' project to reach out to 10,000 children across 70 rural schools near the Solur LPG plant in Bangalore.

Under Project Boond, 20 villages were converted from 'water scarce to water positive'. The project is being extended to districts in Karnataka and Uttar Pradesh.

As a part of the Livelihood Programme, BPCL has, in collaboration with SEWA, a reputed NGO, imparted chikankari skills to 500 women in Lucknow. Similar training in zardosi work was made available to 100 women in Loni in collaboration with the NGO, AROH. 300 youth in Ranchi (Jharkhand) were trained in partnership with Dr. Reddy's Foundation. In an effort to bring agro-based knowledge through technology, making the process simple and easily accessible to the women farmers, a programme has been initiated with the MS Swaminathan Research Institute for the widows of farmers in the district of Wardha. In an effort to reach medical facilities to tribals, a programme was undertaken to train the para health workers working in Bastar in Chattisgarh.

A Corporate CSR Booklet ' Umang' was released, capturing all the CSR initiatives undertaken across the country. BPCL won the 'CIDC Vishwakarma Award 2012' for CSR for the second consecutive year and also won the 'Aqua Excellence Award' for Project Boond. BPCL was recently conferred with the Aaj Tak Care award under the Livelihood category for the project 'Economic Empowerment and Income Generation' which has benefited and impacted rural women in Lucknow.

PROMOTION OF SPORTS

BPCL sportspersons continued to excel in the national and international sports arena in various sports disciplines. Ace shuttler, Saina Nehwal became the first Indian to win an Olympic medal in Badminton. She won the Bronze medal at the London Olympics 2012. Saina also won the Swiss Open Gold Grand Prix, the Thailand Open Grand Prix Gold title in Bangkok before winning the Super Series event in Jakarta, Indonesia. She is currently ranked no. 5 in the world. Jwala Gutta was conferred with the prestigious Arjuna Award in Badminton. She also won a Bronze Medal in the Women's Doubles Category at the World Championships. PV.V Sindhu, another Badminton star, won the Youth Commonwealth Games, Swiss International Challenge, Indonesian International Challenge, Maldives International Challenge and Tata Indian Open. In Table Tennis, Poulami Ghatak created history by winning the National Championship for a record 7th time. Soumyajit Ghosh won the Youth National Championships in Table Tennis and Bronze Medal at the World Junior Championship, World Junior Circuit Grand Final and Senior National Championships. He also represented India at the London Olympics. Another table tennis player, Sanil Shetty won three Gold Medals at the National Table Tennis Championships. All the above table tennis players represented India at the Asian and World Table Tennis Championships in 2012. In Hockey, Tushar Khandker and Birendra Lakra were part of the Indian hockey team that won the Olympic qualifier which enabled India to qualify for the London Olympics. Another hockey player, Ravi Pal was a member of the Indian team which won the Asian Champions trophy. Chess Grand Masters Abhijeet Gupta, P Harikrishna and Parimarjan Negi displayed outstanding performances in Elite International Chess tournaments. G. N. Gopal, P. Harikrishna, Parimarjan Negi and Abhijeet Gupta represented India at the World Team Chess Championships. Abhijeet Gupta, who is the current national champion, won Gold Medals at the Dubai Open, Vizag International and London Chess Classic Open tournaments. P Harikrishna won Gold Medals at the Asian Chess Championship and at the Cappelle La Grande International Open tournaments. Parimarjan Negi won a Gold Medal at the Baverian Open and Bronze Medals at the Dubai Open and Qin Huang Dao Open. In Cricket, Pragyan Ojha represented India in the Test Series against England and Australia. Manish Pandey and Jaydev Unadkat were part of the India 'A' team on its tour to Australia. In Billiards, Devendra Joshi won a Silver Medal at the Jim Williamson World Open Billiards Championships. He also represented India in the World Billiards Championship. Manan Chandra represented India at the Asian Snooker and World Snooker Championships.

In the physically challenged category, Joby Mathew won several Gold/ Silver Medals in the National Para Games and a Bronze Medal in the National Arm Wrestling Championship. He also represented India in the World Arm Wrestling Championship.

RESERVATION AND OTHER WELFARE MEASURES FOR SCHEDULED CASTES/SCHEDULED TRIBES/ OTHER BACKWARD CLASSES AND PERSONS WITH DISABILITIES

BPCL has been following in letter and spirit, the Presidential Directives and other guidelines issued from time to time by Ministry of Petroleum & Natural Gas (MOP & NG), Ministry of Social Justice and Empowerment and the Department of Public Enterprises relating to reservations / concessions for Scheduled Castes / Scheduled Tribes / Other Backward Classes. Mechanisms have been put in place to ensure sustained and effective compliance of the guidelines across the Corporation. Rosters are maintained as per the Directives and are regularly inspected by the Liaison Officer of the Corporation as well as the Liaison Officer of MOP & NG to ensure proper compliance of the directives. SC/ST and economically backward students are encouraged by awarding scholarships to students completing their graduation or undertake courses at Industrial Training Institutes.

BPCL also complies with provisions under "The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation), Act 1995" relating to providing employment opportunities for Persons with Disabilities (PWDs).

Details relating to representation/appointment of Scheduled Castes / Scheduled Tribes / Other Backward Classes and Persons with Disabilities are enclosed as Annexure D. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Official Language Implementation Committees continued to function at the Corporate, Regional, Refinery and major location levels, to take decisions based on the annual programme issued by Ministry of Home Affairs, besides the provisions of Official Language Act and Rules. These Committees perform the task of reviewing the progress made in Official Language Implementation on a quarterly basis.

The first Sub - Committee of the Parliamentary Committee on Official Language carried out inspection of select offices and appreciated the overall work done so far in regard to Official Language implementation. The Corporation's website is now available in Hindi in addition to English. Unlimited license for Hindi Software ISM V6 Office with Unicode features was procured and loaded in computers across all offices. Important manuals were made bilingual and most publicity material was prepared in Hindi and English. Competitions and cultural programmes were organized at various locations all over the country, on the occasion of Hindi Fortnight, which was celebrated during September, 2011. World Hindi Day was celebrated on 10th January, 2012 at all offices.

CITIZENS' CHARTER

The "Citizens' Charter" is always in the forefront of all activities of the Company. The Citizens' Charter on marketing of petroleum products by BPCL has been put up on the corporate website. It broadly covers all aspects about the products marketed along with the customer's rights like standard, quality, time frame of service delivery, grievance redressal mechanism, transparency and accountability that are available to the citizen. Further, it elaborates the selection guidelines procedure for dealers and distributors along with the third party audit for the services promised to the customer. It is a tool for ensuring transparency in educating and communicating with the customer and enhancing customer service levels. A well established system for Grievance Redressal is in place at various consumer contact points. The State Coordinators situated in all the States / Union Territories act as nodal officers for personal hearing in solving the grievances of the customers. Additionally, with effect from 1st April, 2012, all the Territory Managers of LPG and Retail have been appointed as nodal officers for personal hearing without appointment thrice a week at fixed hours. An internet based online Grievance Redressal Mechanism (Centralised Public Grievance Redressal and Monitoring System) of Government of India is helping in speedy redressal of grievances. A link to this site is available on the BPCL website. Also, toll free numbers are available to the customer so that they can call on these numbers from anywhere in the country for registering complaints / suggestions. Besides, BPCL has also made available a feedback module in its website for the customer.

The Right to Information (RTI) Act 2005 has been implemented in BPCL since its inception. People across the organization are familiar with the Act. During the period ending 31st March, 2012, BPCL has provided information to 4,229 requests. 33 cases were referred to the Chief Information Commissioner, New Delhi. With increased awareness among the public and mushrooming of RTI activists across the country, the number of queries are increasing exponentially and accordingly from 1st April, 2012, BPCL has appointed 84 Central Public Information Officer (CPIO) and 11 Appellate Authorities against 3 CPIOs and 1 Appellate Authority in the previous year.

VIGILANCE

Corporate Vigilance, BPCL has made great strides in enhancing the ethical standards of the organisation by encouraging sound business practices and good corporate governance through an effective balance of proactive and preventive measures.

As part of the preventive vigilance activities, Vigilance Officers, during their visits to Installations / Retail Outlets (ROs) / Depots, guided the officers and staff on the various procedures and guidelines of CVC / BPCL / MOP&NG. Inspections were conducted at 231 BPCL locations, 635 ROs and 230 LPG Distributorships as part of preventive vigilance. Based on the outcome of such inspections, preventive / administrative actions and system improvements were initiated. Chief Technical Examiner (CTE) type inspections of major projects/ works were undertaken and observations with specific recommendations were advised to the concerned departments. System studies were also carried out and recommendations based on the findings were advised. Vigilance has proactively enabled Business Units to identify vulnerable areas in their existing procedures / processes in major areas such as bill payments, dealer / distributor selections, reconstitution of dealerships / distributorships, file tracking, e-payments, etc. Workshops / seminars were designed on the case study model for concerned officers. Based on the feedback and inputs obtained through these, the required system improvements were recommended.

In addition to the above roles, Corporate Vigilance conducted detailed investigation into the complaints and source information received. During the year, 532 complaints including 430 online complaints were received and investigated. In matters referred by CVC and MOP&NG, necessary investigations were carried out and recommendations given within the time-frame. A one day workshop conducted by Shri. Suresh Govindarajan on Complaint Handling, Report Writing and Investigation Techniques was organized at Mumbai for the Vigilance Officers.

The Vigilance Awareness Period (31st Oct. - 5th Nov. 2011) was observed in the two Refineries and across all locations of BPCL. C&MD, in the presence of CVO and the Directors, administered the oath and this was webcast at all the locations throughout the country. The second issue of the vigilance journal "Vigilance Plus" was released and received excellent feedback. The online version of the newsletter of Vigilance Department - "Vigilance Plus Online" was brought out on the Intralink site in August 2011. "Vendor Meets" were conducted in three regions for feedback from important stakeholders. Slogan / essay / quiz competitions were conducted for employees / school children. A talk by Shri. T. R. Raghunandan, IAS (Retd) was organized at the Corporate Office.

Widening the reach among the stakeholders, Corporate Vigilance introduced "Integrity Clubs" (ICs) last year as a corporate initiative to instill ethical values in school children and transform them into valuable Change Agents in Civil Society. The first "Integrity Club" was started at Kochi Refinery School and received great response. This movement has now been extended to five more schools under Kendriya Vidyalaya Sangatan in Kerala. The activities of the IC at Kochi Refinery such as reaching out to the weakest and the needy have evoked an enthusiastic response from the public.

To increase transparency in interface with vendors, contractors, suppliers and service providers, the coverage of tenders hosted on the corporate website has been increased and at present includes tenders of Original Equipment Manufacturers and Proprietary items also. The Integrity Pact has been implemented and was made mandatory for all tenders above Rs. 1 crore. Bill Payments Monitoring system has been rolled out and implemented across the Corporation.

SUBSIDIARY COMPANIES

Numaligarh Refinery Limited (NRL)

NRL was incorporated in 1993 with an authorized capital of Rs. 1000 crores. It is a Mini Ratna company (Category I) and has a 3 MMTPA refinery at Numaligarh in Assam. BPCL holds 61.65% of the paid up equity in NRL as on 31st March, 2012. The refinery processed highest ever crude oil of 2.82 MMT of crude oil during the year 2011-12 as compared to 2.25 MMT processed in the previous year. As on 31st March, 2012 the Refinery completed 10 years of Lost Time Accident (LTA) free operations since the date of the last LTA on 18th February, 2002. NRL achieved highest ever turnover of Rs. 14,004.25 crores for the financial year ending 31st March, 2012 as compared to Rs. 8,955.14 crores in the previous year. The Company's profit after tax for the year stood at Rs. 183.70 crores as against a profit of Rs. 279.26 crores in the previous year, which is due to high crude oil cost vis-a-vis product price realisation from the market. The earnings per share (EPS) for the year 2011-12 amounted to Rs. 2.50 as compared to Rs. 3.80 in 2010-11. The Board of Directors of NRL have recommended a dividend of Rs. 1 per share of Rs. 10 each for the current financial year as compared to Rs. 1.50 per share of Rs. 10 each for the previous year. NRL had a net worth of Rs. 2,699.26 crores and a book value of Rs. 36.69 per share as at 31st March, 2012.

Bharat PetroResources Limited (BPRL)

Bharat PetroResources Ltd (BPRL) was incorporated in the year 2006 as a wholly owned subsidiary company of BPCL with the objective of implementing BPCL's plans in the upstream exploration and production sector. As on 31st March 2012, the authorized capital of BPRL is Rs. 3000 crores and the subscribed and paid up share capital of BPRL is Rs. 1100 crores. The exploration and production activities of BPRL and its subsidiary companies extend to 26 exploration blocks where they hold participating interests (PI). Of this, 11 blocks are in India and 15 are abroad. Besides India, BPRL has blocks in Australia, Brazil, East Timor, Indonesia, Mozambique and the United Kingdom. BPRLs total acreage in all these blocks is around 68,000 sq.km, of which approx 89% is offshore acreage. These blocks are in various stages of exploration.

BPRL had formed a wholly owned subsidiary company, Bharat PetroResources JPDA Limited through which it holds a participating interest of 20% in Block-JPDA 06-103-East Timor in the Joint Petroleum Development Area between Australia and East Timor. Further, BPRL has incorporated a wholly owned subsidiary company, BPRL International B.V., Netherlands which in turn has incorporated 3 wholly owned subsidiary companies viz. BPRL Ventures B.V., BPRL Ventures Mozambique B.V. and BPRL Ventures Indonesia B.V., for undertaking exploration activities in various countries. BPRL Ventures B.V. has 50% stake in IBV Brasil Petroleo Limitada, which has participating interests ranging from 20% to 40% in 10 blocks in Brazil. BPRL Ventures Mozambique B.V. has participating interest of 10% in a block in Mozambique, and BPRL Ventures Indonesia B.V. holds participating interest of 12.5% in a block in Indonesia.

BPRL earned income of Rs. 1.81 crores for the financial year ending 31st March, 2012 and had a loss of Rs. 88.94 crores as compared to income of Rs. 0.67 crores and loss of Rs. 18.98 crores for the financial year ending 31st March, 2011.

Annual Accounts of the Subsidiary Companies

In view of the dispensation granted by the Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8th February, 2011, copies of the Balance Sheet, Profit and Loss Account, Directors' Report and the Auditors' Report of the Subsidiary Companies are not attached to the Balance Sheet of the Company. In compliance with the conditions of the dispensation, the Consolidated Financial Statements have been presented in the Annual Report and financial information of the Company's subsidiaries, as required, is disclosed in the Annual Report as Annexure F to the Directors' Report for information. The Audited Annual Accounts of Subsidiary Companies and related detailed information are open for inspection to Members at BPCL's Registered Office. Further, BPCL would make available / furnish these documents, on request, to any of its Members and the said documents would also be posted on BPCL's website.

JOINT VENTURE COMPANIES Petronet LNG Limited (PLL)

PLL was formed in April, 1998 for importing LNG and setting up LNG terminal with facilities like jetty, storage, regasification etc. to supply natural gas to various industries in the country. The Company has an authorised capital of Rs. 1200 crores. PLL was promoted by four public sector companies viz. BPCL, Indian Oil Corporation (IOC), Oil and Natural Gas Corporation Limited (ONGC) and GAIL (India) Limited (GAIL). Each of the promoters holds 12.5% of the equity capital of PLL. The other major shareholders include Gaz de France with a 10% equity stake and Asian Development Bank holding 5.2% of the equity capital of the Company. The balance 34.8% is held by the public. BPCL's equity investment in PLL currently stands at Rs. 98.75 crores. As at 31st March, 2012, PLL had a net worth of Rs. 3,519.78 crore with a book value of Rs. 46.93 per share.

PLL recorded a sales turnover of Rs. 22,696 crores in the financial year ended as on 31st March, 2012 as compared to Rs. 13,197 crores recorded in 2010-11. The net profit for the year stood at Rs. 1,057.54 crores as compared to Rs. 619.62 crores in the previous year. The EPS for the year 2011-12 amounted to Rs. 14.10 as compared to Rs. 8.26 in 2010-11. PLL has declared a dividend of Rs. 2.50 per share for the financial year 2011-12 as compared to Rs. 2 per share during the previous year.

Indraprastha Gas Limited (IGL)

IGL, a Joint Venture Company with GAIL as the other co-promoter, was set up in December, 1998 with an authorised capital of Rs. 220 crores for implementing the project for supply of Compressed Natural Gas (CNG) to the household and automobile sectors in Delhi. BPCL invested Rs. 31.50 crores in IGL for 22.5% stake in its equity. IGL has commissioned over 241 CNG stations which supply the environment friendly fuel to more than 4,30,000 vehicles. IGL has more than 2,40,000 domestic PNG customers and over 427 commercial customers in Delhi. The Company is also extending its business to the towns of Greater Noida and Ghaziabad.

IGL has registered a turnover of Rs. 2,790.10 crores and a profit after tax of Rs. 306.43 crores for the financial year ending as on 31st March, 2012 as compared to a turnover of Rs. 1,951.50 crores and a profit after tax of Rs. 259.77 crores in the previous year. IGL has declared a dividend of Rs. 5 per share against a dividend of Rs. 5.0 per share in the previous year. IGLs net worth was Rs. 1,228.94 crores with a book value of Rs. 87.78 per share as at 31st March, 2012. The shares of the Company are listed on the Bombay Stock Exchange Limited, and National Stock Exchange of India Limited.

Sabarmati Gas Limited (SGL)

SGL, a Joint Venture Company promoted by BPCL and Gujarat State Petroleum Corporation (GSPC), was incorporated on 6th June 2006 with an authorized capital of Rs. 100 crores for implementing the City Gas distribution project for supply of CNG to the household and automobile sectors in Gandhinagar, Mehsana and Sabarkantha Districts of Gujarat.

Both the promoters have a stake of 25% each in the equity capital of SGL and the balance has been subscribed to by financial institutions. SGL has set up 23 CNG stations. SGL has achieved a turnover of Rs. 704.33 crores and profit after tax of Rs. 11.03 crores for the financial year ending 31st March, 2012 against a turnover of Rs. 455.58 crores and profit after tax of Rs. 27.56 crores in the previous year. The Company has not yet proposed dividend on equity shares for the financial year ending 31st March, 2012. Dividend of 15% was declared in the previous year. Central UP Gas Limited (CUGL)

CUGL is a Joint Venture Company set up in March, 2005 with GAIL as the other partner for implementing the project for supply of CNG to the household, industrial and automobile sectors in Kanpur and Bareilly in Uttar Pradesh. The Company was incorporated with an authorised share capital of Rs. 60 crores. The joint venture partners have each invested Rs. 15 crores in the joint venture, with each partner having an equity stake of 25% in the Company. The balance equity share capital has been subscribed to by Infrastructure Development Finance Company Limited (IDFC), Asian Development Bank (ADB) and Infrastructure Leasing & Financial Services Limited (ILF&S). CUGL has set up 11 CNG stations. The Company has commenced its PNG operations.

CUGL has achieved a turnover of Rs. 124.71 crores and profit of Rs. 21.13 crores for the financial year ending 31st March, 2012 as compared to a turnover of Rs. 73.37 crores and a profit of Rs. 12.30 crores in the previous year. The EPS for the year stood at Rs. 3.52 as against Rs. 2.06 in 2010-11. The Board of Directors has recommended a payment of dividend at Rs. 1.25 per share for the current year against Rs. 0.70 that was paid in the earlier year. Maharashtra Natural Gas Limited (MNGL)

MNGL was set up on 13th January, 2006 as a Joint Venture Company with GAIL for implementing the project for supply of CNG to the household, industrial and automobile sectors in Pune and its nearby areas. The Company was incorporated with an authorised share capital of Rs. 100 crores. BPCL and GAIL have invested Rs. 22.50 crores each in MNGLs equity capital. The Maharashtra Government will hold a 5% stake in the Company. The balance equity shares have been subscribed by IDFC, IL&FS and Axis Bank as shareholders. The Company has set up 14 CNG stations so far.

MNGL has achieved a turnover of Rs. 85.48 crores for the financial year ending 31st March, 2012 and profit of Rs. 12.10 crores for the year as against a turnover of Rs. 35.48 crores and profit of Rs. 0.03 crores in the previous year.

Bharat Stars Services Private Limited (BSSPL)

BSSPL, a Joint Venture Company promoted by BPCL and ST Airport Pte Limited, Singapore was incorporated on 13th September, 2007 with an authorised share capital of Rs. 10 crores for providing into plane fuelling services at the new Bengaluru International Airport. The authorised share capital of BSSPL was subsequently enhanced to Rs. 20 crores.

The two promoters have each subscribed to 50% of the equity share capital of BSSPL and BPCL's present investment stands at Rs. 10 crores. The Company, which commenced its operations at the new international airport in Bengaluru from May, 2008, has also incorporated a wholly owned subsidiary for providing into plane fuelling services at the new T3 Terminal of Delhi International Airport. The Company is also planning to enter Calicut Airport and other nearby airports.

BSSPL has achieved a turnover of Rs. 10.38 crores for the financial year ending 31st March, 2012 and profit of Rs. 1.50 crores as against a turnover of Rs. 8.72 crores and a profit of Rs. 1.24 crores in the previous year. BSSPL has declared a dividend of Rs. 0.40 per share for the current year as against Rs. 0.20 per share for the previous year.

Bharat Renewable Energy Limited (BREL)

BREL was incorporated on 17th June, 2008 for undertaking the production, procurement, cultivation and plantation of horticulture crops such as karanj, jatropha and pongamia, trading, research and development and management of all crops and plantation including Bio-fuels in the State of Uttar Pradesh, with an authorized capital of Rs. 30 crores. The Company has been promoted by BPCL with Nandan Biomatrix Limited, Hyderabad and Shapoorji Pallonji Company Limited, through their affiliate. Each of the partners will have an equal stake in the equity capital of the joint venture. The project envisages plantation of Jatropha in 1 million acres (4,04,686 hectares) of marginal land which has the potential of generating employment / self employment for 1 million people and produce 1 million tonnes of Bio-diesel with an investment of Rs. 2,200 crores over the next 10-15 years.

The Government of Uttar Pradesh has approved the project under "Jeevan Jyoti," a scheme of the Government which has the benefit of release of funds under the MGNREG Scheme.

BREL has also embarked on a revenue generation stream by initiating action for nursery plantation and a seed collection centre.

BREL has earned miscellaneous income of Rs. 0.06 crores for the financial year ending 31st March, 2012 and incurred a loss of Rs. 1.84 crores as against a miscellaneous income of Rs. 0.03 crores and a loss of Rs. 1.74 crores in the previous year.

Matrix Bharat Pte Limited (MBPL)

MBPL is a Joint Venture Company incorporated in Singapore on 20th May, 2008 for carrying on the bunkering business and supply of marine lubricants in the Singapore market as well as international bunkering, including expanding into Asian and Middle East markets. The Company has been promoted by BPCL and Matrix Marine Fuels LP USA, an affiliate of the Mabanaft group of companies, Hamburg, Germany. The authorised capital of the Company is USD 4 million, which is equivalent to Rs. 20 crores. Both the partners have contributed equally to the share capital. Matrix Marine Fuels LP USA has subsequently transferred their share and interest in the joint venture in favour of Matrix Marine Fuels Pte Limited, Singapore, another affiliate of the Mabanaft group. The name of the Company has been changed from Matrix Bharat Marine Services Pte Ltd to Matrix Bharat Pte Ltd.

The Company has begun the ex-pipe bunkering operations in August, 2008. The Company will also undertake development of international bunkering facilities at Indian ports, risk management including hedging activities, inventory management, and quality blending and freight optimization by utilizing the back haulage of time charter vessels for importing petroleum products in India. MBPL has achieved a turnover of USD 928.71 million and earned a profit of USD 0.33 million for the year ending 31st March, 2012 as compared to a turnover of USD 402.33 million and a profit of USD 0.40 million in the previous year.

Petronet India Limited (PIL)

BPCL has 16% equity participation with an investment of Rs. 16 crores in PIL, which was formed as a non-government financial holding company to give impetus to the development of pipeline networks throughout the country. PIL has facilitated pipeline access on a common carrier principle through joint ventures for pipelines put up by them viz. Vadinar-Kandla, Kochi-Coimbatore-Karur and Mangalore-Hassan-Bangalore. PIL registered income of Rs. 0.23 crores and a net loss of Rs. 0.25 crores for the financial year ending 31st March, 2012 as against income of Rs. 0.23 crores and a net loss of Rs. 1.46 crores in the previous year.

The new pipeline policy announced by the Government of India some time back has affected the future of the company as interested companies are permitted to undertake pipeline projects and PIL does not have any new projects in hand. As such, promoters and other investors in PIL have reached a conclusion that continuation of PIL would not be viable. Accordingly, the winding up process has been initiated and the process of divesting PILs 26% equity in the three joint venture companies promoted by it is in progress. The Board of Directors of BPCL, in its meeting held in December 2006 accepted PILs offer to buy its 26% stake in the equity of Petronet CCK Limited where BPCL already holds 49% of the paid up share capital. This is awaiting receipt of approval of the Government of India. Petronet CCK Limited (PCCKL)

BPCL has invested a sum of Rs. 49 crores for a 49% stake in the equity capital of PCCKL, a Joint Venture Company promoted with PIL with an authorised share capital of Rs.135 crores. The Company owns 292 Km long multi-product Kochi-Karur pipeline from BPCL's installation at Irimpanam to Karur for transportation of MS, HSD and SKO. The pipeline commenced commercial operations from September, 2002.

The pumping volume during the year 2011-12 amounted to 2.21 MMT as against 1.87 MMT in the previous year. PCCKL registered a turnover of Rs. 69.50 crores and net profit of Rs. 20.34 crores for the financial year ending 31st March, 2012 as compared to a turnover of Rs. 54.87 crores and net profit of Rs. 8.91 crores in the previous year. BPCL has initiated steps subject to completion of all formalities to purchase the 26% share of PIL in PCCKL. Delhi Aviation Fuel Facility Private Limited (DAFFPL)

A new Joint Venture Company, DAFFPL, has been promoted by BPCL, IOC and Delhi International Airport Limited (DIAL) for implementing Aviation Fuel facility for the new T3 terminal at Delhi International Airport. BPCL and IOC have subscribed to 37% of the share capital of the joint venture while the balance has been taken by DIAL. BPCLs onsite assets at the Delhi Airport were transferred to the Joint Venture. DAFFPL has registered a turnover of Rs. 122.75 crores and net profit of Rs. 32.34 crores for the financial year ending 31st March, 2012 as against a turnover of Rs. 96.05 crores and net profit of Rs. 34.67 crores in the previous year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The details regarding energy conservation, technology absorption and foreign exchange used and earned as required by Section 217(1 )(e) of the Companies Act, 1956, are given in Annexure A.

MEMORANDUM OF UNDERSTANDING WITH MINISTRY OF PETROLEUM & NATURAL GAS

BPCL for the twenty-third successive year has entered into a Memorandum of Understanding (MOU) for the year 2012-13 with the Ministry of Petroleum & Natural Gas. BPCL has been achieving an "Excellent" performance rating since 1990-91.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)

Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is enclosed as Annexure C.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement and Department of Public Enterprises (DPE) Guidelines, the Report on Corporate Governance, together with the Auditors' Certificate on compliance of Corporate Governance, is annexed as Annexure B. The Report also indicates the extent of BPCLs compliance of the Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs.

The Company has engaged M/s. Dholakia & Associates, Company Secretaries for conducting the Secretarial Audit for the year 2011-12. The Secretarial Audit Report is enclosed as part of Annexure B.

The forward looking statements made in the 'Management Discussion and Analysis' are based on certain assumptions and expectations of future events. The Directors cannot guarantee that these assumptions are accurate or these expectations will materialize.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of BPCL confirm that:

1. In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

2. The Company has selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as on 31st March 2012 and of the Statement of Profit and Loss of the Company for the year ended on that date.

3. The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. These Accounts have been prepared on a going concern basis.

DIRECTORS

Shri. B.K. Datta, Executive Director (Supply Chain Optimization) was appointed as Additional Director with effect from 1.8.2011. The shareholders have appointed him as Director of the Company at the Annual General Meeting held on 16.9.2011.

Shri. S. K. Joshi, Director (Finance) has superannuated on 31.8.2011. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company's business.

Shri. S. Varadarajan, Executive Director (Finance) was appointed to the post of Director (Finance) of the Company from 1.9.2011. The shareholders have appointed him as Director of the Company at the Annual General Meeting held on 16.9.2011.

Dr. S. Mohan, Director (Human Resources) has superannuated on 31.10.2011. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company's business.

Shri. S.P Gathoo, Executive Director (HRS) was appointed as Additional Director with effect from 3.11.2011. He also assumed the office of Director (Human Resources) from that date in pursuance of appointment by the Govt. of India. As he has been appointed as Additional Director, he will hold office till the ensuing AGM. Notice under section 257 has been received proposing his name for appointment as Director at the ensuing Annual General Meeting (AGM). Shri. P K. Sinha, Special Secretary & Financial Advisor, Ministry of Petroleum & Natural Gas resigned from the Board with effect from 1.3.2012. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company's business.

Prof. J. R. Varma was appointed as Additional Director with effect from 10.08.2012. As he has been appointed as Additional Director, he will hold office till the ensuing AGM. Notice under section 257 has been received proposing his name for appointment as Director at the ensuing AGM.

Shri. B. Chakrabarti was appointed as Additional Director with effect from 10.08.2012. As he has been appointed as Additional Director, he will hold office till the ensuing AGM. Notice under section 257 has been received proposing his name for appointment as Director at the ensuing AGM. Shri. R.N. Choubey, Director General, Directorate General of Hydrocarbons, Ministry of Petroleum & Natural Gas was appointed as Additional Director with effect from 10.08.2012. As he has been appointed as Additional Director, he will hold office till the ensuing AGM. Notice under section 257 has been received proposing his name for appointment as Director at the ensuing AGM.

Shri. I.PS. Anand, Shri. Haresh M. Jagtiani and Shri. Alkesh Kumar Sharma, Secretary, Investment Promotion, Government of Kerala, Directors, will retire by rotation at the ensuing AGM as per the provisions of Section 256 of the Companies Act, 1956, and being eligible, offer themselves for re-appointment as Directors at the said Meeting.

As required under the Corporate Governance Clause, brief bio-data of the above Directors who are appointed / reappointed at the Annual General Meeting are provided in the Corporate Governance Report.

STATUTORY AUDITORS

M/s. T.R. Chadha & Co, Chartered Accountants, Mumbai and M/s. K. Varghese & Co, Chartered Accountants, Kochi, were appointed as Statutory Auditors for the year 2011-12, by the Comptroller & Auditor General of India (C&AG), under the provisions of Section 619 (2) of the Companies Act, 1956. They will hold office till the ensuing Annual General Meeting. The said firms have also been appointed as the Statutory Auditors for the financial year 2012-13 by the C&AG.

COST AUDITORS

During the year 2011-12, seven cost audit reports pertaining to the Refineries & Lube plants have been filed with the Ministry of Corporate Affairs on 28th August, 2011 and 30th August, 2011. The due date for filing these cost audit reports was 30th September, 2011. These cost audit reports pertain to the year 2010-11 and the cost auditors were M/s. N. I. Mehta & Co., Mumbai and M/s. Muralidhar Mohan & Associates, Mumbai.

The same cost auditors have been appointed for the year 2011-12. The due date for filing the cost audit reports for 2011-12 has now been extended till 31st December, 2012 by MCA. Necessary action is being taken to file the reports as required.

ACKNOWLEDGEMENTS

The Directors express their earnest appreciation for the untiring efforts of every employee of the Organisation without which BPCL would not have been able to achieve the challenging targets in all areas of operations.

The Directors are thankful for the guidance received from different Ministries of the Government of India particularly the Ministry of Petroleum & Natural Gas and from various State Governments which has facilitated the smooth and efficient functioning of the Company.

The Directors also acknowledge the continuing patronage and support extended to BPCL by all the stakeholders including customers, dealers, distributors, contractors and suppliers.

The Directors would like to extend their sincere thanks to each and every shareowner for their unstinted support in all our endeavors.

For and on behalf of the Board of Directors

Sd/-

Mumbai R. K. Singh

Date: 10th August, 2012 Chairman & Managing Director


Mar 31, 2011

Dear Members,

The Directors take pleasure in presenting their Report on the performance of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31st March, 2011.

PERFORMANCE OVERVIEW

Group Performance

The aggregate Refinery throughput at BPCL's Refineries at Mumbai and Kochi and that of its subsidiary company, Numaligarh Refinery Limited (NRL) in 2010-11 was 24.03 Million Metric Tonnes (MMT) as compared to 23.03 MMT in 2009-10. The market sales volume of the BPCL Group for 2010-11 stood at 29.58 MMT, as compared to 28.25 MMT in the previous year. The group also exported 2.61 MMT of petroleum products during the year as against 2.51 MMT in 2009-10.

During the year 2010-11, the BPCL group achieved a sales turnover of Rs166,038.80 crores as compared to Rs133,749.10 crores recorded in 2009-10. The Profit after Tax for the year stood at Rs1,742.06 crores as against Rs1,719.98 crores in 2009-10. After setting off the minority interest, the Group earnings per share for the year stood at Rs45.22 as compared to Rs45.15 in 2009-10.

CONSOLIDATED GROUP RESULTS 2010-11 2009-10

Physical Performance

Crude Throughput (MMT) 24.03 23.03

Market Sales (MMT) 29.58 28.25

Financial Performance Rs Crores

Sales / Income from Operations 166,038.80 133,749.10

Less: Excise Duty Paid (12,393.83) (9,932.38)

Net Sales / Income from Operations 153,644.97 123,816.72

Gross Profit 5,986.47 5,341.35

Interest 1,246.84 1,124.66

Depreciation & amortization 1,891.37 1,444.56

Profit before tax 2,848.26 2,772.13

Provision for taxation – Current 864.47 1,324.75

Profit after Current Tax 1,983.79 1,447.38

Provision for taxation – Deferred 159.72 (301.27)

Short provision for Taxation in earlier years provided for 82.01 28.67

Net Profit 1,742.06 1,719.98

Minority Interest 107.10 87.62

Net Income of the group attributable to BPCL 1,634.96 1,632.36

Group Earnings per share attributable to BPCL (Rs) 45.22 45.15

COMPANY RESULTS

Physical Performanc 2010-11 2009-10

Crude Throughput at Mumbai and Kochi Refineries (MMT) 21.78 20.41

Market Sales (MMT) 29.27 27.89

Financial Performance Rs Crores

2010-11 2009-10

Sales Turnover - Gross 163,218.21 131,499.72

Gross Profit before Depreciation, Interest and Tax 5,168.83 4,619.32

Interest 1,100.78 1,010.95

Depreciation & amortization 1,655.40 1,242.32

Profit before tax 2,412.65 2,366.05

Provision for Taxation - Current 628.00 1,127.00

Provision for Taxation - Deferred 148.24 (303.25)

Short provision for taxation in earlier years provided for 89.73 4.68

Net Profit 1,546.68 1,537.62

Balance brought forward 181.06 76.37

Amount available for disposal 1,727.74 1,613.99

The Directors propose to appropriate this amount as under:

Towards Dividend:

Final (proposed) Dividend - 506.16 506.16

Towards Corporate Dividend Tax 71.08 72.77

For transfer to Debenture Redemption Reserve - 700.00

For transfer to General Reserve 650.50 154.00

Balance carried to Balance Sheet 500.00 181.06

Summarized Cash Flow Statement :

Cash Flows:

Inflow/(Outflow) from operations 4,206.31 (1,515.15)

Inflow/(Outflow) from investing activities 627.00 1,538.43

Inflow/(Outflow) from financing activities (1,817.00) 652.09

Net increase/(decrease) in cash & cash equivalents 3,016.31 675.37

Company Performance

BPCL recorded a sales turnover of Rs163,218.21 crores in the year 2010-11. This represents an increase of 24.12 % over the previous year's turnover of Rs131,499.72 crores. In terms of volume, sales increased from 27.89 MMT in 2009-10 to 29.27 MMT in 2010-11, showing an increase of 4.95%. The profit before tax for the year went up by 1.97% over the preceding year to reach a level of Rs2,412.65 crores, as against Rs2,366.05 crores in 2009-10. After providing for tax, (including deferred tax) of Rs865.97 crores in 2010-11, as against Rs828.43 crores in 2009-10, the profit after tax for the year stood at Rs1,546.68 crores, as compared to Rs1,537.62 crores in the financial year ended 31st March, 2010.

The Board of Directors has recommended a dividend of 140% (Rs14 per share) for the year on the paid-up share capital of Rs361.54 crores, which will absorb a sum of Rs577.24 crores out of the profit after tax inclusive of Rs71.08 crores for Corporate Dividend Tax on distributed profits. BPCL's net worth as on 31st March, 2011 stands at Rs14,057.62 crores, as compared to Rs13,086.71 crores as at the end of the previous year.

The earnings per share for the year stood at Rs42.78 in 2010-11 as compared to Rs42.53 in 2009-10. Internal cash generation during the year increased from Rs1,898.10 crores in 2009-10 to Rs2,759.31 crores. During the year, BPCL's contribution to the exchequer by way of taxes and duties amounted to Rs36,010.08 crores as against Rs26,685.75 crores in the previous financial year.

Borrowings from banks decreased from Rs18,743.87 crores as at 31st March, 2010 to Rs16,088.57 crores at the close of the financial year 2010-11. There was no outstanding balance under the Collateralized Borrowing and Lending Obligation (CBLO) through Clearing Corporation of India Limited as at the end of the year as compared to Rs500 crores at the end of the previous year. The outstanding amount of loans from Oil Industry Development Board decreased to Rs871.75 crores as at 31st March, 2011 from Rs921.37 crores at the end of the previous year. Debentures worth Rs1,000 crores were issued during the year and remained outstanding as on 31st March 2011 in addition to the debentures of Rs1,000 crores issued in 2009-10.

There was no balance on account of Public deposits as at 31st March 2011 as compared to Rs0.24 crores at the end of the previous year. The amount of deposits, matured but unclaimed, at the end of the year was Rs0.09 crores, which pertains to 24 depositors.

The total Capital Expenditure during the year 2010-11 amounted to Rs2,532.20 crores which is lower than the expenditure in 2009-10 when it stood at Rs3,446.77 crores during the previous year.

The Comments of the Comptroller and Auditor General of India (C&AG) on the Accounts for the year ended 31st March, 2011 along with the explanation of the Board of Directors are annexed as Annexure E.

REFINERIES MUMBAI REFINERY

During the year 2010-11, Mumbai Refinery processed 13.02 MMT of crude oil as against 12.52 MMT processed in 2009-10. This was the highest level of crude oil processing achieved in a single year by the refinery. This represents a capacity utilization of 108% as compared to 104% in the previous year. During the year, the refinery achieved its highest ever production of Liquefied Petroleum Gas (LPG), Aviation Turbine Fuel (ATF), High Speed Diesel (HSD) and Lube Base Oils. The refinery also met the demand for Motor Spirit (MS) and HSD complying with Euro IV quality norms. The year also saw the refinery process 3 new crude oils viz. Malaysia crude oil - Kikeh and Libyan crude oils - El Sharara & Mellitah for the first time, thus bringing the total number of crude oils processed by Mumbai Refinery so far to 75. The gross refining margin (GRM) for the year stood at USD 4.23 per barrel as compared to USD 1.78 per barrel realized in 2009-10. The overall gross margin for the refinery in 2010-11 amounted to Rs1,884.88 crores as compared to Rs792.63 crores in 2009-10. The increase in GRM was mainly due to favorable crude product spreads in the current year, as reflected in the increase in the Singapore Dubai cracking margin from USD 3.5 per barrel in 2009-10 to USD 5.2 per barrel in 2010-11.

KOCHI REFINERY

Kochi Refinery achieved a crude throughput of 8.76 MMT in 2010-11 as compared to 7.89 MMT in 2009-10. This was the highest throughput achieved by the refinery in any year, surpassing the level of 8.17 MMT achieved in 2007-08. During the year, the refinery processed 2 new crude oils - El Sharara and Mellitah from Libya for the first time. The refinery earned a GRM of USD 4.83 per barrel in 2010-11 as against USD 4.87 per barrel in 2009-10. This translates into a total GRM of Rs1,445.76 crores for the year as against Rs1,366.63 crores earned in 2009-10. KRL's capacity utilization for the year 2010-11 was 103.1% as compared to 105.2% achieved in the previous year. The details of the performance of the Refineries, their activities and future plans are discussed in the Management Discussion and Analysis Report (MD&A).

MERGER OF KRL WITH BPCL

As informed in the last year's Report, merger of the erstwhile Kochi Refineries Limited (KRL) with BPCL under Sections 391 to 394 of the Companies Act 1956 had been completed, following receipt of the Order dated 18th August 2006 issued by the Ministry of Company Affairs, New Delhi. One of the Shareholders of the erstwhile KRL had filed a Writ Petition in the Delhi High Court challenging the merger, and the same is pending as on date.

MARKETING

During the year 2010-11, BPCL's market sales volume stood at 29.27 MMT as compared to 27.89 MMT in the previous year. BPCL thus recorded a growth of 4.95% over the sales volume of the previous year. There was no change in BPCL's market share amongst the public sector oil companies, which stood at 22.49% as at 31st March, 2011.

A detailed discussion of the performance of the Marketing function is given in the MD&A.

PROJECTS

Central India Refinery Project

Bharat Oman Refineries Limited (BORL), promoted by BPCL, has recently commissioned a 6 MMTPA grass roots refinery at Bina in Madhya Pradesh. Besides, crude oil import facilities consisting of a Single Point Mooring (SPM) system and Crude Oil Storage Terminal (COT) have been set up at Vadinar in Gujarat. A 935 km cross-country crude oil pipeline of 24" (60.96 cm) dia from Vadinar to Bina has been built for moving crude oil to the refinery. The refinery will help BPCL in meeting the product requirements in the northern and central regions of the country. The total cost of the project is estimated at Rs12,208 crores which has been funded with a debt equity ratio of 1.6 : 1.

BORL has an authorized share capital of Rs7,000 crores and paid up capital of Rs1,777.23 crores. The refinery has been set up in partnership with Oman Oil Company (OOC). Besides the initial investment of Rs75.5 crores in the share capital of BORL, OOC has made an additional investment of Rs1,219.67 crores in 81.31 crores equity shares of Rs10 each at a premium of Rs5 per share. As on date, BPCL has subscribed to Rs88.86 crores equity shares of Rs10 each in BORL by investing a sum of Rs888.61 crores including the initial investment of Rs75.5 crores. In addition, BPCL has invested a sum of Rs935.68 crores against which it was allotted 78.61 crores warrants representing the right to subscribe to 78.61 crores equity shares of Rs10 each at a later date. Till the time the total equity of BORL is tied up, BPCL and OOC will hold 50% shares in BORL. On a future date, BPCL and OOC will hold 49% and 26% respectively in the fully diluted equity of BORL. The individual units, tankages and pipelines have been commissioned. All process units have been independently tested. The integrated process run commenced on 1st May, 2011. The Refinery has been dedicated to the nation by the Hon'ble Prime Minister of India, Dr. Manmohan Singh on 20th May, 2011. The cumulative capital expenditure as on 30th June, 2011 amounted to Rs11,390 crores.

Bina Product Despatch Terminal

The Bina Product Despatch Terminal is designed to facilitate the marketing of products from the new refinery at Bina. The despatch terminal was constructed with a tankage of 4.45 lakh kilolitres for storing white oils, 10 bay road loading gantry and single spur rail loading gantry for white oils, 6 x 1400 MT LPG mounded storage, 4 bay road loading gantry for LPG, 12 km long railway siding and other associated infrastructural facilities, adjacent to the Bina refinery. The facilities have been commissioned in stages and road despatches have commenced. The approved cost of the project is Rs639.11 crores and the cumulative expenditure as on 30th June, 2011 stood at Rs606.57 crores.

Bina Kota Product Pipeline

The project, with an approved cost of Rs405.82 crores involved laying of an 18" (45.72 cm) dia, 257 km long cross-country product pipeline from Bina to Kota, to facilitate the economic evacuation of MS, HSD, Superior Kerosene Oil (SKO) and ATF from the Bina refinery. The pipeline is designed for an initial throughput of 2.8 MMTPA and will be connected to the existing multi-product Mumbai-Manmad- Manglya-Piyala-Bijwasan pipeline at Kota to facilitate distribution of products to the markets in northern India. The pipeline is mechanically complete and will be commissioned on receipt of sufficient quantity of finished product from the Bina Refinery. The cumulative expenditure on the project as on 30th June, 2011 stood at Rs375.09 crores.

Capacity Expansion cum Modernization Project (CEMP) – Phase II at Kochi Refinery

The project involved the putting up of facilities for the production of auto fuels i.e. MS and HSD conforming to Euro – III / IV equivalent norms along with modernization and capacity expansion of the refinery from 7.5 MMTPA to 9.5 MMTPA. All the units envisaged in the project viz. capacity expansion of the Crude Distillation Unit, VGO HDS Unit, NHT/CCR Unit, SRU Unit, Captive Power Plant and other utilities have been completed and commissioned progressively. The total expenditure on the project as on 30th June, 2011 was Rs3,260.67 crores as against the approved project cost of Rs3,941.41 crores.

Continuous Catalytic Regeneration Reformer (CCR) Facilities and Hydrocracker Revamp

The project is being undertaken to increase the production of Euro IV grade MS and HSD at Mumbai Refinery. The project involves revamping of the Hydrocracker Unit to increase the capacity from 1.75 MMTPA to 2.0 MMTPA and setting up of a 1.2 MMTPA capacity Continuous Catalytic Regeneration Reformer (CCR) Unit at a cost of Rs1,827 crores. The project is expected to be completed by April 2013. As on 30th June, 2011, the project has achieved physical progress of 27.60%. The cumulative expenditure on the project as on 30th June, 2011 stood at Rs136.24 crores while the total commitment as on that date amounted to Rs1,142 crores.

Refrigerated LPG Storage and Handling Facility at JNPT and Uran LPG Plant

The project envisages the development of LPG import facilities at Jawaharlal Nehru Port Trust (JNPT). The project involves erecting of facilities for unloading of refrigerated LPG, a 12.5 km long refrigerated transfer pipeline from the JNPT jetty to Uran LPG Plant and storage in 2 x 8000 MT refrigerated tanks. The project is in the final stage of completion and is likely to be commissioned in November, 2011. The overall progress of the project stood at 95.4% as of 30th June, 2011. The approved cost of the project is Rs304.40 crores while the cumulative expenditure up to 30th June, 2011 was Rs237.80 crores.

Strategic Storage for LPG

Strategic storage for LPG at a total cost of Rs193 crores is being provided by putting up 23 Mounded Storage Vessels (MSVs) at 12 different locations. The work of providing the MSVs at Pune, Nasik, Goa, Chennai, Bangalore and Pithampur (Indore) has been completed and the tanks commissioned. The vessels at Lalru, Saleempur, Mangalore, Dharwad, Jaipur and Kurnool are mechanically complete. The cumulative expenditure on the project as on 30th June, 2011 was Rs171. 57 crores.

Pipeline for Transfer of LPG from BPCR/HPCR Mumbai to Uran LPG Plant

The project consists of laying a 28 km pipeline (12 kms offshore and 16 kms onshore) and providing 3 x 900 MT MSVs at Uran. The pipeline portion of the project costing Rs206.81 crores is being undertaken alongwith Hindustan Petroleum Corporation Limited (HPCL) and the cost will be shared equally by the two companies. The cost of MSVs amounting to Rs40 crores will be to BPCL's account. The process design has been finalized and the tendering / ordering activities have been completed. The pipeline laying and civil works have commenced and the project is likely to be completed by June 2012. The cumulative expenditure on the project as on 30th June, 2011 stood at Rs31.51 crores while the total commitments as on that date amounted to Rs226.90 crores.

RESEARCH & DEVELOPMENT (R&D)

R&D is one of the means by which BPCL aims to achieve future growth by developing new products or processes to improve and expand operations. In order to improve its abilities to undertake R&D activities, BPCL is continuously strengthening the infrastructure and manpower resources at its Corporate R&D Centre, Greater Noida, Uttar Pradesh as well as at its Product & Application Development Centre, Sewree, Mumbai and the R&D Centre at Kochi Refinery. BPCL's initiatives in the area of R&D are discussed separately in the MD&A.

Further, the areas covered under R&D and the benefits derived from R&D activities are detailed in Form B of Annexure A to the Directors' Report.

NON-CONVENTIONAL ENERGY INITIATIVES

BPCL has taken several steps to develop non-conventional/ renewable sources of energy and has undertaken various initiatives in tapping non-conventional energy sources like bio-diesel, bio-ethanol, wind energy, solar energy and fuel cells.

BPCL has been exploring the possibility of promoting green fuels with a view to protect the environment by reducing pollution and dependency on imported fuels. In the State of Uttar Pradesh, BPCL has launched the Bio-diesel Value Chain project for which a Joint Venture Company, Bharat Renewable Energy Limited has been incorporated. As on 31st March, 2011, the Company has identified about 1 lakh acres (40469 hectares) of waste / arid land, out of which 3122 acres (1263.44 hectares) of Jatropha plantation has been done across the State. The Joint Venture Company has also signed agreements with Panchayats for 52,000 acres (21043.88 hectares) of land. BPCL is also in discussion with the State Governments of Bihar, Madhya Pradesh and Karnataka to set up Bio-Diesel Value Chains in these states.

BPCL in coordination with the Government of Karnataka has identified the location at Bio-fuel Technology Park, Hassan for setting up a Green Fuel Retail Outlet (GFRO) jointly with the Department of Agriculture, Government of Karnataka. Bio-diesel will be supplied by the Technology Park to the Retail Outlet and blended Bio-diesel will be marketed through this outlet. Work is currently on to secure all the statutory approvals for the same.

BPCL has been one of the first oil companies to successfully generate power through windmills. Windmills with a capacity of 5 MW (four windmills of 1.25 MW each) in the hilly range of Kappatguda in Karnataka have been operating since 2007. The power produced is sold to the Karnataka State Electricity grid. This was one of the projects identified to avail of carbon emission credits under the Kyoto protocol. The project was approved by UNFCCC in February 2009. BPCL has plans to make further investments in windmills in the states of Rajasthan, Maharashtra, Gujarat, Tamil Nadu and Madhya Pradesh.

A 1 MW capacity grid connected solar farm is being set up at BPCL's LPG bottling plant in Lalru, in the state of Punjab. The project has been approved by Indian Renewable Energy Development Agency Limited under Rooftop and Small Solar Power Generation Programme (RPSSGP) guidelines under the National Solar Mission. The Power Purchase Agreement (PPA) with Punjab State Power Corporation Ltd. has been signed for a period of 25 years for evacuating the power generated from the plant through the grid.

INDUSTRIAL RELATIONS

The overall Industrial Relations climate remained peaceful and cordial throughout the year. Negotiations with the Unions are in progress for signing the Long Term Wage Settlement both in Marketing and Refineries.

FULFILLMENT OF SOCIAL OBLIGATIONS

Corporate Social Responsibility initiatives (CSR) in BPCL have emerged from the belief that it is only through collective effort that change can be brought about in society. BPCL's CSR initiatives are pan India in reach and involve collaboration with a number of Non-Government Organisations (NGOs) who are committed to the cause of social development and people empowerment. BPCL has successfully completed various projects in the fields of education, water conservation, health, environment conservation and economic empowerment, where the communities have achieved sustainability.

The CSR targets are a part of BPCL's Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The Company has taken a target of making 8 drought prone villages 'water positive' through rainwater harvesting and positively reaching out to 15,000 children through its 'Education' initiatives. BPCL has been successful in making 8 'drought free' villages and reaching out to about one lakh underprivileged children by enabling qualitative and inclusive education. BPCL has also undertaken several initiatives like Computer Assisted Learning, Education Assistance Programme and Teach for India Programme, in rural areas of Uran, Panvel and Nandurbar districts and Mumbai in Maharashtra, Lucknow in Uttar Pradesh and Sagar District in Madhya Pradesh, thus enabling the spread of quality education in the country.

A third party social impact assessment of the vocational training project in Chikankari work, for rural women in a tribal village near Lucknow, was undertaken. Around 80 women on an average earn about Rs1500 per month and have registered as a Self Help Group. Based on the recommendations of the impact assessment and the success of the project, the same has been replicated to cover 250 women in poverty stricken villages near the LPG bottling plant in Lucknow. BPCL also replicated the vocational training programme for 250 youth in Ranchi after successful completion of the same covering 300 youth in Muzaffarpur, who now on an average, earn Rs3500 per month.

BPCL's CSR projects continue to receive enthusiastic support from the Company's employee volunteers, who have dedicated their personal time towards water conservation and education initiatives by teaching children from the lower socio-economic strata. Through their energized efforts, BPCL has accomplished 3500 employee volunteering hours.

BPCL envisions exploiting the available resources and skills to their fullest potential to achieve maximum results through enrollment of all stakeholders, including the entire BPCL family, in this process of being Socially Responsible, thereby creating leadership and ownership values throughout the Corporation. BPCL received the 'CIDC Vishwakarma Award 2011' for the good work done in the area of CSR.

PROMOTION OF SPORTS

BPCL sportspersons continued to excel in the national as well as international sports arena in the disciplines of Cricket, Hockey, Badminton, Chess, Table Tennis, Kabaddi, Volleyball, Billiards, Snooker and Golf. Ace Badminton player, Saina Nehwal was conferred with the prestigious 'Rajiv Gandhi Khel Ratna' award, the highest recognition conferred on an Indian sportsperson. She was also the first Indian woman player to be ranked no. 3 in the world. Saina became the first woman to win four Super Series titles in a calendar year. Several sportspersons from BPCL represented India in the Commonwealth and Asian Games and won Medals. In Badminton, Saina Nehwal won the Gold Medal in Women's Singles and Silver Medal in the Team event. In the Women's Doubles event, Jwala Gutta won the Gold Medal. Aditi Mutatkar was also a member of the Indian Women's Badminton Team that clinched Silver in the Team event. Poulami Ghatak in Table Tennis won Silver and Bronze Medal in the Team event and Women's Doubles respectively. In Hockey, Tushar Khandekar and Ravi Pal were members of the team that won the Silver Medal at the Commonwealth Games. In the Asian Games, Vibin George was a member of the Indian Volleyball team that won the Bronze Medal. Chess players G.N. Gopal & P. Harikrishna won the Bronze Medal in the Asian Team Chess Championship. Parmarjan Negi, another ace Chess player was conferred with the prestigious Arjuna Award.

In cricket, S. Sreesanth was a member of the World Cup winning Indian Cricket Team. Kabaddi Player Nilesh Shinde made his debut for the Indian Team and won the Asian Gold Medal. Joby Mathew won the Silver Medal in the Badminton World Open in the disabled category. Pragyan Ojha, Sreesanth, Jaydev Unadkat in Cricket, Tushar Khandekar, Hari Prasad, Ravi Pal, Birendra Lakra in Hockey, Poulomi Ghatak in Table Tennis, Saina Nehwal, Aditi Mutatkar, Jwala Gutta & Arvind Bhat in Badminton and Vibin George in Volleyball have represented India in various international events and won accolades. BPCL also bagged the Second Runners-up "President's Trophy" of Petroleum Sports Promotion Board (PSPB) during the year.

RESERVATION AND OTHER WELFARE MEASURES FOR SCHEDULED CASTES/SCHEDULED TRIBES/ OTHER BACKWARD CLASSES AND PERSONS WITH DISABILITIES

BPCL has been following in letter and spirit, the Presidential Directives and other guidelines issued from time to time by the Ministry of Petroleum & Natural Gas, the Ministry of Social Justice and Empowerment and the Department of Public Enterprises relating to reservations / concessions for Scheduled Castes / Scheduled Tribes / Other Backward Classes. Adequate monitoring mechanisms have been put in place for sustained and effective compliance uniformly across the Corporation. Rosters are maintained as per the Directives and are regularly inspected by the Liaison Officer of the Corporation as well as the Liaison Officer of the Ministry of Petroleum & Natural Gas, to ensure proper compliance of the Directives.

Students belonging to Scheduled Castes / Scheduled Tribes and Economically Backward classes are encouraged by awarding scholarships to enable them to complete their education up to graduation level and for pursuing courses at Industrial Training Institutes. During the year 2010-11, 88 students were awarded scholarships under these schemes.

BPCL also complies with provisions under "The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation), Act 1995" relating to providing employment opportunities for Persons with Disabilities (PWDs).

A Special Recruitment Drive was undertaken for OBC and PWD categories and 35 OBC / 13 PWD candidates were appointed during the year 2010-11.

Details relating to representation/appointment of Scheduled Castes / Scheduled Tribes / Other Backward Classes and Persons with Disabilities are enclosed as Annexure D.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Official Language Implementation Committees continue to function at the Corporate, Regional, Refinery and major location levels in order to implement various provisions of the Official Language Act and Rules across the Company, in line with the Annual Program issued by the Government of India. Several Hindi workshops were conducted in 2010-11. During the year, the first sub-committee of Parliamentary Committee on Official Language visited the Corporate Office, Piyala LPG Plant, Madurai Depot and Noida Regional office. Joint Secretary, Ministry of Petroleum & Natural Gas visited the Corporate Office and carried out inspection of Hindi activities. Rajyabhasha Vibhag of the Ministry of Home Affairs inspected 6 locations on an all India basis. All the Committees expressed their appreciation of the efforts taken by BPCL on the promotion of Hindi.

BPCL's website was launched in bilingual form. Hindi fortnight was celebrated at all major locations during September 2010 with various Hindi competitions organized. During the year, training programmes for the Hindi software 'ISM V5 Office' continued in all the Regions and Refineries. The ISM V5 helpline module was installed on Intralink for the benefit of users.

CITIZENS' CHARTER

BPCL remains committed to providing customers with all information relating to their rights, in addition to the products and services being offered to them. There is a well established Grievance Redressal Mechanism in operation at all consumer contact points. The Area Marketing Managers situated in all the States / Union Territories act as nodal officers for personal hearing and resolution of customer grievances. The internet based online Grievance Redressal Mechanism (Centralised Public Grievance Redressal and Monitoring System) continues to be leveraged to facilitate the speedy solution of customer issues. BPCL has disposed off 437 grievances online during the year. BPCL also continues to provide the facility of designated toll free numbers to enable customers from anywhere in the country to lodge their complaints or give their suggestions.

The Right to Information (RTI) Act 2005 has been implemented in BPCL since its inception. People across the organization are familiar with the Act. BPCL has a unique single window concept for all replies under the Act. During the period ending 31st March, 2011, BPCL has received 2726 requests for information, of which 2027 were attended to and out of these, 74 cases were referred to the Chief Information Commissioner, New Delhi for review. The balance 699 requests were under process as per the Act. No adverse remarks have been made against BPCL at any time since the inception of the Act in October 2005. With a view to facilitate prompt attendance to requests for information, two additional Public Information Officers have been created - one for the LPG business and the other for the Retail business.

VIGILANCE

Corporate Vigilance in BPCL has made great strides in enhancing the ethical standards of the organisation by encouraging sound business practices and good corporate governance through an effective balance of preventive and proactive measures.

As part of the preventive vigilance activities, Vigilance officials, during their visits to various locations, guided the officers and staff on all the relevant procedures and guidelines. Inspections were conducted at 190 locations, 495 retail outlets and 172 LPG distributorships. Based on the outcome of these inspections, preventive/administrative actions and system improvements were initiated. Detailed inspections of major projects/works were also undertaken and observations with specific recommendations were made available to the concerned departments. Vigilance has proactively enabled Business Units to identify vulnerable areas in their existing procedures/processes relating to aspects like bill payments, dealer/distributor selections, reconstitution of dealerships/distributorships, file tracking, e-payments, etc. Workshops / seminars were designed on the case study model and delivered for the benefit of the concerned officers. Based on the feedback and inputs obtained, the required system improvements were recommended. A Bill Payment Monitoring System has been rolled out and implemented across the Company.

Corporate Vigilance also conducted detailed investigation into the complaints and source information received. During the year, 406 complaints including 309 online complaints were received and investigated.

Vigilance Awareness Week, between 25th October to 1st November, 2010, was observed at all locations of BPCL. The first issue of the vigilance journal, "Vigilance Plus" was released during the year. Vendor Meets were conducted in three regions for getting feedback from important stakeholders. With a view to cover a wider section of stakeholders, Corporate Vigilance introduced the concept of "Integrity Clubs" as a corporate initiative to instill ethical values in school children and transform them into valuable change agents in civil society. The first "Integrity Club" was started at Kochi Refinery School and received a great response. This movement has now been extended to five more schools under Kendriya Vidyalaya Sangatan in Kerala.

SUBSIDIARY COMPANIES

Numaligarh Refinery Limited (NRL)

NRL was incorporated in 1993 with an authorized capital of Rs1,000 crores. It is a Mini Ratna Company (Category I) with a 3 MMTPA refinery at Numaligarh in Assam. As on 31st March, 2011, BPCL holds 61.65% of the paid up equity in NRL. The refinery processed 2.25 MMT of crude oil during the year 2010-11 as compared to 2.62 MMT processed in the previous year. As on 31st March, 2011 the Refinery completed 9 years of Lost Time Accident (LTA) free operations (equivalent to 1.63 crores man-hours) since the date of the last LTA. NRL achieved a turnover of Rs8,972.19 crores for the financial year ending 31st March, 2011 as compared to Rs7,874.09 crores in the previous year. The Company's profit after tax for the year stood at Rs279.26 crores as against a profit of Rs232.08 crores earned in the previous year. The earning per share (EPS) for the year 2010-11 amounted to Rs3.80 as compared to Rs3.15 in 2009-10. The Board of Directors of NRL has declared a dividend of Rs1.50 per share of Rs10 each for the current financial year, which is the same as in the previous year. NRL had a net worth of Rs2,601.06 crores and a book value of Rs35.36 per share as at 31st March, 2011.

Bharat Petro Resources Limited (BPRL)

BPRL was incorporated in 2006 as a wholly owned subsidiary company of BPCL, with the objective of implementing BPCL's plans in the upstream exploration and production sector. During the financial year 2010-11, the authorized capital of BPRL was increased from the existing Rs1,000 crores to Rs3,000 crores considering the need for long term resources for various projects in India and abroad. As on 31st March, 2011, the subscribed and paid up share capital of BPRL was Rs1,100 crores which was entirely held by BPCL. The exploration and production activities of BPRL and its subsidiary companies extend to 27 exploration blocks, where they hold participating interests (PI). Of this, 9 blocks are in India and 18 are abroad. Besides India, BPRL has blocks in Australia, Brazil, East Timor, Indonesia, Mozambique and the United Kingdom. BPRL's total acreage in all these blocks is around 81,000 sq.km, of which approx. 90% is offshore acreage. These blocks are in various stages of exploration.

BPRL had formed a wholly owned subsidiary company, Bharat Petro Resources JPDA Limited (BPR-JPDA LTD) through which it holds a participating interest of 20% in Block-JPDA 06-103-East Timor in the Joint Petroleum Development Area between Australia and East Timor. Further, BPRL has incorporated a wholly owned subsidiary company, BPRL International BV, Netherlands which in turn, has incorporated 3 wholly owned subsidiary companies viz. BPRL Ventures BV, BPRL Ventures Mozambique BV and BPRL Ventures Indonesia BV, for undertaking exploration activities in various countries. BPRL Ventures BV has 50% stake in IBV Brasil Petroleo Limitada, which has participating interests ranging from 20% to 40% in 10 blocks in Brazil. BPRL Ventures Mozambique BV has participating interest of 10% in a block in Mozambique, and BPRL Ventures Indonesia BV holds participating interest of 12.5% in a block in Indonesia.

BPRL earned income of Rs0.67 crores for the financial year ending 31st March, 2011 and had a loss of Rs18.98 crores as compared to an income of Rs0.42 crores and loss of Rs35.72 crores for the previous year. The consolidated loss for the year was Rs57.50 crores as against profit of Rs97.89 crores in the previous year.

Annual Accounts of the Subsidiary Companies

In view of the dispensation granted by the Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8th February, 2011, copies of the Balance Sheet, Profit and Loss Account, Directors' Report and Auditors' Report of the Subsidiary Companies are not attached to the Balance Sheet of the Company. In compliance with the conditions of dispensation, the Consolidated Financial Statements have been presented in the Annual Report and financial information of the Company's subsidiaries, as required, is disclosed in the Annual Report as Annexure F to the Directors' Report for information. The Audited Annual Accounts of the Subsidiary Companies and related detailed information will be made available to members of BPCL and the Subsidiary Companies seeking such information at any point of time. The Annual Accounts of the Subsidiary Companies will also be kept for inspection by any member in the Registered Office of BPCL and of the concerned Subsidiary Companies. BPCL will furnish a hard copy of details of accounts of subsidiaries to any member on demand. The said documents would also be posted on BPCL's website.

JOINT VENTURE COMPANIES

Petronet LNG Limited (PLL)

PLL was formed in April, 1998 for importing LNG and setting up LNG terminals with facilities like jetty, storage, regasification etc. to supply natural gas to various industries in the country. The Company has an authorised share capital of Rs1,200 crores. PLL was promoted by four public sector companies viz. BPCL, Indian Oil Corporation Limited (IOC), Oil and Natural Gas Corporation Limited (ONGC) and GAIL (India) Limited (GAIL). Each of the promoter companies holds 12.50% of the equity capital of PLL. The other major shareholders include Gaz de France with a 10% equity stake and Asian Development Bank with a holding of 5.20% of the equity capital of the Company. The balance 34.80% is held by the public. BPCL's equity investment in PLL currently stands at Rs98.75 crores. As at 31st March, 2011, PLL had a net worth of Rs2,680 crores with a book value of Rs35.73 per share. The regasification capacity at Dahej, which is currently 10 MMPTA, is being further expanded to 12.50 MMPTA. The work on the greenfield terminal at Kochi has already commenced and the terminal is likely to be commissioned by December, 2011.

PLL recorded a sales turnover of Rs13,197 crores in the financial year ending as on 31st March, 2011 as compared to Rs10,649 recorded in 2009-10. The net profit for the year stood at Rs619.61 crores as compared to Rs404.49 crores in the previous year. The EPS for the year 2010-11 amounted to Rs8.26 as compared to Rs5.39 in 2009-10. PLL has declared a dividend of Rs2 per share for the financial year 2010-11 against Rs1.75 per share in the last year.

Indraprastha Gas Limited (IGL)

IGL, a Joint Venture Company promoted by BPCL and GAIL, was set up in December, 1998 with an authorised share capital of Rs220 crores for implementing the project for supply of Compressed Natural Gas (CNG) to the household and automobile sectors in Delhi. BPCL invested Rs31.50 crores for a 22.5% equity stake in the capital of IGL. IGL has commissioned over 278 CNG stations which supply the environment friendly fuel to more than 4,30,000 vehicles. IGL has more than 2,40,000 domestic Piped Natural Gas (PNG) customers and over 427 commercial customers in Delhi. The Company is also extending its business to the towns of Greater Noida and Ghaziabad. IGL has registered a turnover of Rs1,950.00 crores and a profit after tax of Rs258.43 for the financial year ending on 31st March, 2011 as compared to a turnover of Rs1,213.14 crores and a profit after tax of Rs215.49 crores in the previous year. IGL has declared a dividend of Rs5 per share as compared to Rs4.50 per share in the previous year. IGL's net worth was Rs1,083.88 crores with a book value of Rs77.42 per share as at 31st March, 2011.

Sabarmati Gas Limited (SGL)

SGL, a Joint Venture Company promoted by BPCL and Gujarat State Petroleum Corporation (GSPC), was incorporated on 6th June 2006 with an authorized capital of Rs100 crores for implementing the City Gas distribution project for supply of CNG to the household and automobile sectors in Gandhinagar, Mehsana and Sabarkantha Districts of Gujarat.

Both the promoters have a stake of 25% each in the equity capital of SGL and the balance has been subscribed to by financial institutions. SGL has set up 15 CNG stations. The Company has achieved a turnover of Rs462.32 crores and profit after tax of Rs26.76 crores for the financial year ending on 31st March, 2011 against a turnover of Rs297.74 crores and profit after tax of Rs21.30 crores in the previous year.

Central UP Gas Limited (CUGL)

CUGL is a Joint Venture Company set up in March 2005 with GAIL as the other partner for implementing the project for supply of CNG to the household, industrial and automobile sectors in Kanpur and Bareilly in Uttar Pradesh. The Company was incorporated with an authorised share capital of Rs60 crores. The joint venture partners have each invested Rs15 crores in the joint venture, with each partner having an equity stake of 25% in the company. The balance equity share capital has been subscribed to by Infrastructure Development Finance Company Limited (IDFC), Asian Development Bank (ADB) and Infrastructure Leasing & Financial Services Limited (IL&FS). CUGL has set up 11 CNG stations.

CUGL has achieved a turnover of Rs73.37 crores and profit of Rs12.30 crores for the financial year ending on 31st March, 2011 as compared to a turnover of Rs45.83 crores and a profit of Rs7.09 crores in the previous year. The EPS for the year stood at Rs2.05 as against Rs1.24 in 2009-10. The Board of Directors has recommended the payment of dividend at the rate Rs0.70 per share as compared to Rs0.35 per share in the previous year.

Maharashtra Natural Gas Limited (MNGL)

MNGL was set up on 13th January, 2006 as a Joint Venture Company with GAIL for implementing the project for supply of CNG to the household, industrial and automobile sectors in Pune and its nearby areas. The Company was incorporated with an authorised share capital of Rs100 crores. BPCL and GAIL have invested Rs22.50 crores each in MNGL's equity capital. The Maharashtra Government will hold a 5% stake in the company. The balance equity shares have been subscribed by IDFC, ILFS and Axis Bank. The Company has set up 14 CNG stations so far.

MNGL has achieved a turnover of Rs36.08 crores for the financial year ending 31st March, 2011 and profit of Rs0.10 crores as against a turnover of Rs10.89 crores and loss of Rs2.52 crores in the previous year.

Bharat Stars Services Private Limited (BSSPL)

BSSPL, a Joint Venture Company promoted by BPCL and ST Airport Pte Limited, Singapore was incorporated on 13th September, 2007 with an authorised share capital of Rs10 crores for providing into plane fuelling services at the new Bengaluru International Airport. The authorised share capital of BSSPL was subsequently enhanced to Rs20 crores.

The two promoters have each subscribed to 50% of the equity share capital of BSSPL and BPCL's present investment stands at Rs10 crores. The Company, which commenced its operations at the new international airport in Bengaluru from May, 2008 has also incorporated a wholly owned subsidiary for implementing into plane fuelling services at the new T3 Terminal at Delhi International Airport. BSSPL has achieved a turnover of Rs2.54 crores for the financial year ending 31st March, 2011 and profit of Rs0.75 crores as against a turnover of Rs2.90 crores and a profit of Rs0.64 crores in the previous year.

Bharat Renewable Energy Limited (BREL)

BREL was incorporated on 17th June, 2008 for undertaking the production, procurement, cultivation and plantation of horticulture crops such as karanj, jatropha and pongamia, trading, research and development and management of all crops and plantation including Biofuels in the state of Uttar Pradesh, with an authorized capital of Rs30 crores. The Company has been promoted by BPCL with Nandan Biomatrix Limited, Hyderabad and Shapoorji Pallonji Company Limited, through their affiliate. Each of the par tners will have an equal stake in the equity capital of the joint venture. The project envisages plantation of Jatropha in 1 million acres (404690 hectares) of marginal land which has the potential of generating employment / self employment for 1 million people and producing 1 million tonnes of Bio-diesel with an investment of Rs2,200 crores over the next 10-15 years.

The Government of Uttar Pradesh has approved the project under "Jeevan Jyoti," a scheme of the Government which has the benefit of release of funds under the Mahatma Gandhi National Rural Employment Guarantee scheme. BREL has identified 1,00,000 acres (40469 hectares) of wasteland for plantation. Efforts are also being made to source saplings of Jatropha under the aegis of Bio-Tech Park, Lucknow through approved nurseries and franchisees. Work is on for getting necessary approvals for the identified land and in preparing the land for plantation. BREL has earned miscellaneous income of Rs0.03 crores for the financial year ending 31st March, 2011 and incurred a loss of Rs1.74 crores as against a miscellaneous income of Rs0.08 crores and a loss of Rs1.44 crores in the previous year.

Matrix Bharat Marine Services Pte Limited (MBMS)

MBMS is a Joint Venture Company incorporated in Singapore on 20th May, 2008 for carrying on the bunkering business and supply of marine lubricants in the Singapore market, as well as international bunkering, including expanding into Asian and Middle East markets. The Company has been promoted by BPCL and Matrix Marine Fuels LP USA, an affiliate of the Mabanaft group of companies, Hamburg, Germany. The authorised capital of the Company is USD 4 million, which is equivalent to Rs20 crores. Both the partners have contributed equally to the share capital. Matrix Marine Fuels LP USA has subsequently transferred their share and interest in the joint venture in favour of Matrix Marine Fuels Pte Limited, Singapore, another affiliate of the Mabanaft group.

The Company has begun the ex-pipe bunkering operations in August, 2008. The Company will also under take development of international bunkering facilities at Indian ports, risk management including hedging activities, inventory management, and quality blending and freight optimization by utilizing the back haulage of time charter vessels for importing petroleum products in India. MBMS has achieved a turnover of USD 402.33 million and earned a profit of USD 0.40 million as compared to a turnover of USD 229.95 million and a loss of USD 0.65 million in the previous year.

Petronet India Limited (PIL)

BPCL has 16% equity participation with an investment of Rs16 crores in PIL, which was formed as a non-government financial holding company to give impetus to the development of pipeline networks throughout the country. PIL has facilitated pipeline access on a common carrier principle through joint ventures for pipelines put up by them viz. Vadinar-Kandla, Kochi-Coimbatore-Karur and Mangalore-Hassan-Bangalore. PIL registered income of Rs0.23 crores and a net loss of Rs1.31 crores for the financial year ending 31st March, 2011 as against income of Rs0.41 crores and a net loss of Rs0.94 crores in the previous year.

The new pipeline policy announced by the Government of India some time back has affected the future of the Company, as interested companies are permitted to undertake pipeline projects and PIL does not have any new projects in hand. As such, promoters and other investors in PIL have reached a conclusion that continuation of PIL would not be viable. Accordingly, the winding up process has been initiated and the process of divesting PIL's 26% equity in the 3 joint venture companies promoted by it is in progress. The Board of Directors of BPCL, in its meeting held in December 2006, accepted PIL's offer to buy its 26% stake in the equity of Petronet CCK Limited where BPCL already holds 49% of the paid up share capital. This is awaiting receipt of approval of the Government of India.

Petronet CCK Limited (PCCKL)

BPCL has invested a sum of Rs49 crores for a 49% stake in the equity capital of PCCKL, a Joint Venture Company promoted with PIL with an authorised share capital of Rs135 crores. The Company owns the 292 km long multi- product Kochi-Karur pipeline from BPCL's installation at Irimpanam to Karur for transportation of MS, HSD and SKO. The pipeline commenced commercial operations from September, 2002.

The pumping volume during the year 2010-11 amounted to 1.87 MMT as against 1.72 MMT in the previous year. PCCKL registered a turnover of Rs54.87 crores and net profit of Rs8.91 crores for the financial year ending 31st March, 2011 as compared to a turnover of Rs50.42 crores and net profit of Rs4.40 crore in the previous year. BPCL has initiated steps subject to completion of all formalities to purchase the 26% share of PIL in PCCKL.

Delhi Aviation Fuel Facility Private Limited (DAFFPL)

A new Joint Venture Company, DAFFPL, has been promoted by BPCL, IOC and Delhi International Airport Limited (DIAL) for implementing Aviation Fuel facility for the new T3 Terminal at Delhi International Airport. BPCL and IOC will subscribe to 37% of the share capital of the joint venture while the balance will be held by DIAL. BPCL's onsite assets at the Delhi Airport were transferred to the Joint Venture. DAFFPL has registered a turnover of Rs96.06 crores and net profit of Rs34.67 crores for the financial year ending 31st March, 2011.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The details regarding energy conservation, technology absorption and foreign exchange used and earned as required by Section 217(1)(e) of the Companies Act, 1956, are given in Annexure A.

MEMORANDUM OF UNDERSTANDING WITH MINISTRY OF PETROLEUM & NATURAL GAS

BPCL for the twenty-second successive year has entered into a Memorandum of Understanding (MOU) for the year 2011-12 with the Ministry of Petroleum & Natural Gas. BPCL has been achieving an "Excellent" performance rating since 1990-91. BPCL also has the distinction of winning the Prime Minister 's MOU Award for 'Excellence in Per formance' for 1998-99, 2000-01, 2002-03 and 2006-07.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)

Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is enclosed as Annexure C.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement and Department of Public Enterprises (DPE) Guidelines, the Report on Corporate Governance, together with the Auditors' Certificate on compliance of Corporate Governance, is annexed as Annexure B. The Report also indicates the extent of BPCL's compliance of the Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs.

The Company has engaged M/s. Dholakia & Associates, Company Secretaries for conducting Secretarial Audit for the year 2010-11. The Secretarial Audit Report is enclosed as part of Annexure B.

The forward looking statements made in the 'Management Discussion and Analysis' are based on certain assumptions and expectations of future events. The Directors cannot guarantee that these assumptions are accurate or these expectations will materialize.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of BPCL confirm that:

1. In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material depar tures.

2. The Company has selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as on 31st March 2011 and of the Profit and Loss Account of the Company for the year ended on that date.

3. The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. These Accounts have been prepared on a going concern basis.

DIRECTORS

Shri T. Balakrishnan, Addtitional Chief Secretary, (I&C), Government of Kerala resigned from the Board with effect from 29th June, 2010 and the Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company's business. Shri Alkesh Kumar Sharma, Secretary (IP), Government of Kerala was appointed as Additional Director on the Board with effect from 30th June, 2010. The Shareholders have appointed him as Director of the Company at the Annual General Meeting held on 24th September, 2010.

Smt. Rama Bijapurkar has tendered her resignation from the Board on 30th June, 2010. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by her for the development and progress of the Company's business.

Shri Ashok Sinha, Chairman & Managing Director has demitted office on the completion of his term of 5 years on 18th August, 2010. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company's business.

Shri S. Radhakrishnan, Director (Marketing) has superannuated on 28th February, 2011. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company's business. Shri K. K. Gupta, Executive Director (Retail) was appointed as Additional Director with effect from 31st March, 2011. He also assumed the office of Director (Marketing) from that date in pursuance of the appointment by the Government of India. As he has been appointed as Additional Director, he will hold office till the ensuing Annual General Meeting. Notice under Section 257 has been received proposing his name for appointment as Director at the ensuing Annual General Meeting.

Shri B. K. Datta, Executive Director (Supply Chain Optimization) was appointed as Additional Director with effect from 1st August, 2011. He also assumed the office of Director (Refineries) from that date in pursuance of the appointment by the Government of India. As he has been appointed as Additional Director, he will hold office till the ensuing Annual General Meeting. Notice under Section 257 has been received proposing his name for appointment as Director at the ensuing Annual General Meeting.

The tenure of Shri S. K. Joshi, Director (Finance) expires on 31.8.2011 consequent to his superannuation. Government of India has advised the appointment of Shri S. Varadarajan, Executive Director to the post of Director (Finance) of the Company from the date of his assumption of charge of the post on or after 1.9.2011. Notice under Section 257 has been received proposing his name for appointment as Director at the ensuing Annual General Meeting.

Prof. S. K. Barua and Dr. S. Mohan, Directors, will retire by rotation at the ensuing Annual General Meeting as per the provisions of Section 256 of the Companies Act, 1956, and being eligible, offer themselves for re-appointment as Directors at the said Meeting.

As required under the Corporate Governance clause, brief bio-data of the above Directors who are appointed / reappointed at the Annual General Meeting are provided in the Corporate Governance Report.

STATUTORY AUDITORS

M/s. B. K. Khare & Co., Chartered Accountants, Mumbai and M/s. K. Varghese & Co., Chartered Accountants, Kochi, were appointed as Statutory Auditors for the year 2010-11, by the Comptroller & Auditor General of India (C&AG), under the provisions of Section 619 (2) of the Companies Act, 1956. They will hold office till the ensuing Annual General Meeting. Appointment of the Statutory Auditors for the financial year 2011-12 by the C&AG is awaited.

COST AUDITORS

During the year 2010-11, 7 cost audit reports pertaining to the Refineries & Lube plants have been filed with the Ministry of Corporate Affairs on various dates viz. 01.09.2010, 07.09.2010, 13.09.2010 and 17.09.2010. The due date for filing these cost audit reports was 30.09.2010. These cost audit reports pertain to the year 2009-10 and the cost auditors were M/s. N. I. Mehta & Co., Mumbai and M/s. Muralidhar Mohan & Associates, Mumbai.

The same cost auditors have been appointed for the year 2010-11. The due date for filing the cost audit reports for 2010-11 is 30.09.2011, for which necessary action is being taken.

ACKNOWLEDGEMENTS

The Directors express their gratitude to the employees who are the most valuable assets of the company and devote the best part of their working lives to the Company to help it achieve its goals and targets.

The Directors are grateful for the assistance and guidance received from the various Ministries of the Government of India, particularly from the Ministry of Petroleum & Natural Gas, which has enabled BPCL to function efficiently.

The Directors place on record their appreciation to BPCL's customers, dealers, distributors, contractors and suppliers for their continued support and patronage. The Directors also thank each and every shareowner of BPCL for their continued support.

For and on behalf of the Board of Directors

Sd/-

New Delhi R. K. Singh

Date : 12th August, 2011 Chairman & Managing Director


Mar 31, 2010

The Directors take pleasure in presenting their Report on the performance of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31st March, 2010.

PERFORMANCE OVERVIEW

Group Performance

The aggregate Refinery throughput at BPCL’s Refineries at Mumbai and Kochi and that of its subsidiary company, Numaligarh Refinery Limited (NRL) in 2009-10 was 23.03 Million Metric Tonnes (MMT) as compared to 22.20 MMT in 2008-09. The BPCL Group ended the year with market sales of 28.06 MMT as compared to 27.45 MMT in the previous year. The group’s exports of petroleum products during the year stood at 2.70 MMT as against 1.38 MMT in 2008-09.

The financial year saw the group achieve a sales turnover of Rs. 133,749.10 crores, as compared to Rs. 147,336.82 crores recorded in 2008-09. The Profit after Tax stood at Rs. 1,719.98 crores in 2009-10 as against Rs. 724.13 crores in the previous year. After setting off the minority interest, the Group earnings per share increased to Rs. 45.15 in the current year from Rs. 17.53 in 2008-09.

CONSOLIDATED GROUP RESULTS

2009-10 2008-09

Physical Performance

Crude Throughput (MMT) 23.03 22.20

Market Sales (MMT) 28.06 27.45

Financial Performance Rs. in Crores

Sales / Income from Operations 133,749.10 147,336.82

Less: Excise Duty Paid (9,932.38) (10,779.70)

Net Sales / Income from Operations 123,816.72 136,557.12

Gross Profit 5,341.35 4,800.60

Interest 1,124.66 2,404.32

Depreciation & amortization 1,444.56 1,261.71

Profit before tax 2,772.13 1,134.57

Provision for taxation - Current 1,324.75 674.06

Profit after Current Tax 1,447.38 460.51

Provision for Fringe Benefit Tax - 14.40

Provision for taxation - Deferred (301.27) (285.11)

Short provision for Taxation in earlier years provided for 28.67 7.09

Net Profit 1,719.98 724.13

Minority Interest 87.62 90.37

Net Income of the group attributable to BPCL 1,632.36 633.76

Group Earnings per share attributable to BPCL (Rs.) 45.15 17.53

Company Performance

During the year 2009-10, the crude throughput at BPCLs refineries at Mumbai and Kochi was 20.41 MMT as against the level of 19.94 MMT achieved in 2008-09. The market sales of the company increased from 27.16 MMT in 2008-09 to 27.70 MMT in 2009-10.

Rs. in Crores

2009-10 2008-09

Sales Turnover - Gross 131,499.72 145,392.07

Gross Profit before Depreciation, Interest and Tax 4,619.32 4,246.01

Interest 1,010.95 2,166.37

Depreciation & amortization 1,242.32 1,075.53

Profit before tax 2,366.05 1,004.11

Provision for Taxation - Current 1,127.00 490.00

Provision for Fringe Benefit Tax - 13.25

Provision for Taxation - Deferred (303.25) (242.13)

Short provision for taxation in earlier years provided for 4.68 7.09

Net Profit 1,537.62 735.90

Balance brought forward 76.37 #

Amount available for disposal 1,613.99 735.90 # Rs. 10,000

The Directors propose to appropriate this amount as under:

Towards Dividend:

Final (proposed) Dividend - 506.16 253.08

Towards Corporate Dividend Tax 72.77 31.45

For transfer to Debenture Redemption Reserve 700.00 300.00

For transfer to General Reserve 154.00 75.00

Balance carried to Balance Sheet 181.06 76.37 Summarized Cash Flow Statement :

Cash Flows:

Inflow/(Outflow) from operations (1,515.15) 6,212.34

Inflow/(Outflow) from investing activities 1,538.43 (9,908.75)

Inflow/(Outflow) from financing activities 652.09 (2,285.32)

Net increase/(decrease) in cash & cash equivalents 675.37 (5,981.73)

BPCLs sales turnover for 2009-10 stood at Rs. 131,499.72 crores, reflecting a reduction of 9.55% over the previous year’s turnover of Rs. 145,392.07 crores. However, the sales in volume terms increased from 27.16 MMT in 2008-09 to 27.70 MMT in 2009-10, registering an increase of 1.99%. The profit before tax for the year increased by 132.65% over the preceding year to reach a level of Rs. 2,366.05 crores as compared to Rs. 1,004.11 crores in 2008-09. After providing for tax, (including deferred tax and fringe benefit tax) of Rs. 828.43 crores as against Rs. 268.21 crores during the last year, the profit after tax for the year stood at Rs. 1,537.62 crores, showing an increase of 108.94% over the level of Rs. 735.90 crores recorded in 2008-09.

The Board of Directors has recommended a dividend of 140% (Rs. 14 per share) for the year on the paid-up share capital of Rs.361.54 crores which will absorb a sum of Rs. 578.93 crores out of the profit after tax inclusive of Rs. 72.77 crores for Corporate Dividend Tax on distributed profits. BPCLs net worth as on 31st March, 2010 stands at Rs. 13,086.71 crores, as compared to Rs. 12,128.11 crores as at the end of the previous year.

The earnings per share amounted to Rs. 42.53 in 2009-10 as compared to Rs. 20.35 in 2008-09. Internal cash generation during the year were higher at Rs. 1,898.10 crores as against Rs. 1,282.29 crores in 2008-09. BPCLs contribution to the exchequer by way of taxes and duties during 2009-10 amounted to Rs. 26,685.75 crores as against Rs.25,331.78 crores in the previous financial year.

Borrowings from banks decreased from Rs. 19,242.56 crores as at 31st March, 2009 to Rs. 18,743.87 crores at the close of the current financial year. The Collateralized Borrowing and Lending Obligation (CBLO) through Clearing Corporation of India Limited amounted to Rs. 500 crores as at the end of the year as compared to Rs. 150 crores at the end of the previous year. Loans from Oil Industry Development Board increased to Rs. 921.37 crores as at 31st March, 2010 as compared to Rs. 761.50 crores at the end of the previous year. Debentures worth Rs. 1,000 crores were issued during the year and remained outstanding as on 31st March 2010 in addition to the debentures of Rs. 1,000 crores issued in 2008-09.

Public deposits as at 31st March 2010 stood at Rs. 0.24 crores as compared to Rs. 3.45 crores at the end of the previous year. The amount of deposits, matured but unclaimed, at the end of the year was Rs. 0.15 crores, which pertains to 35 depositors.

The total Capital Expenditure during the year 2009-10 amounted to Rs. 3,446.55 crores as compared to Rs. 2,389.34 crores during the year 2008-09.

The Comptroller and Auditor General of India (C&AG) has no comment upon or supplement to the Statutory Auditors’ Report on the Accounts for the year ended 31st March, 2010. The letter from C&AG is annexed as Annexure E.

REFINERIES

MUMBAI REFINERY

During the year 2009-10, Mumbai Refinery with an installed capacity of 12 MMTPA, processed 12.52 MMT of crude oil as against 12.26 MMT processed in 2008-09. Notwithstanding the turnarounds in some major units during the year, the refinery achieved a capacity utilization of 104% as compared to 102% in the previous year. The refinery achieved its highest ever production of several products including Liquefied Petroleum Gas (LPG), Methyl Tertiary Butyl Ether (MTBE), Aviation Turbine Fuel (ATF) and Lube Base Oils. The refinery also commenced the production of Euro IV quality Motor Spirit (MS) and High Speed Diesel (HSD) from February 2010. During the year, the refinery processed the Nigerian crude oil - Agbami for the first time. The gross refining margin (GRM) for the year stood at USD 1.78 per barrel as compared to USD 4.48 per barrel in 2008-09. This has translated into an overall gross margin of Rs. 792.63 crores for the year as compared to Rs. 1,892.28 crores in 2008-09. The reduction in the GRM was mainly due to volatility in the international prices of crude oil and finished products and unfavorable crude-product spreads.

KOCHI REFINERY:

Kochi Refinery recorded a throughput of 7.89 MMT in 2009-10 as compared to 7.68 MMT achieved in 2008-09. The capacity utilization of the refinery stood at 105% as compared to 102.4% in the previous year. This was achieved despite a major shutdown undertaken in connection with the capacity expansion of the refinery. The refinery also processed the Agbami crude oil for the first time. The refinery achieved its highest level of production of ATF and packed Bitumen during the year. The gross refining margin for the year 2009-10 was USD 4.87 per barrel as against USD 6.28 per barrel in the previous year. This translated into an overall gross margin of Rs. 1,366.63 crores for the year as compared to Rs. 1,658.78 crores in 2008-09.

The details of the performance of the Refineries, their activities and future plans are discussed in the Management Discussion and Analysis Report (MD&A).

MERGER OF KRL WITH BPCL

As informed in the last year’s Report, merger of the erstwhile Kochi Refineries Limited (KRL) with BPCL under Sections 391 to 394 of the Companies Act 1956 had been completed, following receipt of the Order dated 18th August, 2006 issued by the Ministry of Company Affairs, New Delhi. One of the Shareholders of the erstwhile KRL had filed a Writ Petition in the Delhi High Court challenging the merger, and the same is pending as on date.

MARKETING

During the year 2009-10, BPCLs market sales volume touched a level of 27.70 MMT as compared to 27.16 MMT in the previous year. This represented a growth rate of 1.99% over the previous year. BPCLs market share amongst the public sector oil companies stood at 22.38% as at 31st March, 2010 as compared to 22.62% as at the end of the previous year.

A detailed discussion of the performance of the Marketing function is given in the MD&A.

PROJECTS

Central India Refinery Project

Bharat Oman Refineries Limited (BORL), a company promoted by BPCL, is setting up a 6 MMTPA capacity grass roots Refinery at Bina in Madhya Pradesh. Oman Oil Company Limited (OOC) is partnering BPCL in this project. The refinery is being set up along with crude oil import facilities consisting of a Single Point Mooring (SPM) system and Crude Oil Storage Terminal (COT) at Vadinar and cross-country crude oil pipeline from Vadinar to Bina. The project is estimated to have an as-built capital cost of Rs.11,397 crores which will be funded with a debt equity ratio of 1.6:1.

BORL has an authorized share capital of Rs. 7,000 crores. BPCL and OOC had invested Rs. 75.5 crores each in the equity share capital of BORL. BPCL, with the approval of the Government of India, decided to enhance its equity contribution in the equity of BORL to the extent of 50%. OOC agreed to make an additional investment of Rs. 1,219.67 crores in 81.31 crores equity shares at a premium of Rs. 5 per share for which the Investors Rights Agreement (IRA) was signed between BPCL, OOC and BORL in November 2009. The agreed investment has been brought in and OOC was allotted 81.31 crores equity shares in May 2010. As on 31st March, 2010, BPCL had contributed a sum of Rs. 1,300 crores towards subscribing for shares in BORL. An amount of Rs. 813.11 crores from this was converted into 81.31 crores equity shares at par and allotted to BPCL in May 2010. The balance amount of Rs. 486.89 crores was converted into 48.69 crore warrants representing the right to subscribe to 48.69 crore equity shares of Rs. 10 each. BPCL has also made additional investment of Rs. 448.79 crores against which it was allotted 29.92 crore warrants, which will be entitled for equal number of equity shares of Rs. 10 each at a later date. Till the time the total equity of BORL is tied up, BPCL and OOC will hold 50% shares each in BORL. On a future date, BPCL and OOC will be holding about 49% and 26% respectively in the fully diluted equity of BORL.

The refinery is slated to commence commercial production in the current year. The crude oil receipt facilities at Vadinar and crude oil tankages & intermediate product tankages at the refinery site have been commissioned. The Vadinar - Bina crude oil pipeline has been commissioned and crude oil has been received in the refinery tanks. The Crude Distillation Unit was commissioned on 29th June, 2010. The cumulative capital expenditure as on 30th June, 2010 amounted to Rs. 9,938 crores. The total commitments made up to that date was Rs. 11,012 crores.

Bina Product Despatch Terminal

The Bina Product Despatch Terminal is designed to facilitate the marketing of products from the new refinery at Bina. The dispatch terminal was completed with a tankage of 4.45 lakh kilolitres for storing white oils, 10 bay road loading gantry and single spur rail loading gantry for white oils, 6 x 1400 MT LPG mounded storage, 4 bays road loading gantry for LPG, and other associated infrastructural facilities, adjacent to the Bina refinery. The terminal facilities are mechanically complete. Receipt and road dispatch facilities for LPG and SKO have been commissioned. The balance commissioning will be synchronized with the commissioning of the Bina Refinery. The approved cost of the project is Rs. 639.11 crores and the cumulative expenditure as on 30th June, 2010 stood at Rs. 565.33 crores.

Bina Kota Product Pipeline

The project, with an approved cost of Rs. 405.82 crores, involved the laying of an 18" (45.72 cm) dia, 257 km long cross-country product pipeline from Bina to Kota, to facilitate the economic evacuation of MS, HSD, Superior Kerosene Oil (SKO) and ATF from the new refinery at Bina.

The pipeline is designed for an initial throughput of 2.8 MMTPA and will be connected to the existing multi-product Mumbai-Manmad-Manglya-Piyala-Bijwasan pipeline at Kota to facilitate distribution of products from the Bina refinery to the markets in northern India. The pipeline is mechanically complete and will be commissioned on receiving products from the Bina Refinery. The cumulative expenditure on the project as on 30th June, 2010 stood at Rs. 358.29 crores.

Capacity Expansion cum Modernization Project (CEMP) - Phase II at Kochi Refinery

The project was undertaken to put up facilities for production of auto fuels i.e. MS and HSD conforming to Euro III /IV equivalent norms along with modernization and capacity expansion of the refinery from 7.5 MMTPA to 9.5 MMTPA. The approved cost of the project is Rs. 3,941 crores.

The capacity expansion of the refinery was completed in July 2009 and the balance facilities are expected to be completed by October 2010. The overall physical progress of the project is 96.10 % as on 30th June 2010 and the total expenditure as on that date stood at Rs. 2,731.93 crores.

Fuels Quality Upgrade Project at Mumbai Refinery

The project costing Rs. 390 crores was undertaken to make plant modifications at the Mumbai refinery for improving quality of MS and HSD to meet the Euro IV equivalent norms. The capacity of the Diesel Hydrodesulphurization Unit has been enhanced from 1.4 MMTPA to 2 MMTPA and a new FCC Gasoline Splitter at the Refinery was erected. The project has been completed and the units commissioned in January 2010.

Continuous Catalytic Regeneration Reformer (CCR) Facilities and Hydrocracker Revamp

The project is being undertaken to increase the production of Euro IV grade MS and HSD at Mumbai Refinery. This involves revamping of the Hydrocracker Unit to increase the capacity from 1.75 MMTPA to 2.0 MMTPA and setting up of a 0.9 MMTPA capacity Continuous Catalytic Regeneration (CCR) Reformer Unit at a cost of Rs. 825 crores. The project is scheduled for completion by December 2011. As on 30th June, 2010, the project has achieved physical progress of 19.67 %. The cumulative expenditure as on that date was Rs. 62.54 crores and the total commitment has exceeded Rs. 211.05 crores.

LPG Import Facilities at JNPT with Strategic Storage at Uran

The project is being undertaken to develop LPG import facilities at Jawaharlal Nehru Port Trust (JNPT) including installation of marine unloading arms and associated facilities; laying of 12" (30.48 cm) pipeline from JNPT to Uran LPG plant and development of refrigerated storage at Uran. The approved cost of the project is Rs.304.40 crores.

The project has achieved an overall progress of 65.6% as on 30th June, 2010 and is scheduled for completion in December 2010. The cumulative expenditure as on 30th June, 2010 stood at Rs. 111.39 crores.

Strategic Storage for LPG

Strategic storage for LPG, at a total cost of Rs. 193 crores, is being provided by putting 23 mounded storage vessels at 12 different locations. These were re-designed after standardization of size and capacity, cost optimization and vessel fabrication. The work at locations is expected to be completed by December, 2010.

RESEARCH & DEVELOPMENT (R&D)

Research and development (R&D) is an integral part of BPCL’s strategy for achieving sustainable growth and profitability. To enhance R&D capabilities, BPCL is continuously strengthening the infrastructure and manpower resources at its Corporate R&D Centre, Greater Noida, Uttar Pradesh as well as at its Product & Application Development Centre, Sewree, Mumbai and the R&D Centre at Kochi Refinery. BPCL’s initiatives in the area of R&D are discussed separately in the MD&A.

Further, the areas covered under R&D and the benefits derived from R&D activities are detailed in Form B of Annexure A to the Directors’ Report.

NON-CONVENTIONAL ENERGY INITIATIVES

BPCL has placed strong emphasis on the development of non-conventional/ renewable sources of energy. A number of initiatives have been undertaken in tapping non-conventional energy sources like bio-diesel, wind energy, solar energy and fuel cells in order to develop alternate sources of energy.

BPCL has focused on promoting green fuels with a view to protect the environment by reducing pollution and dependency on imported fuels. Tracts of unproductive, barren and non cultivable fallow land are being used for the growth of Jatropha and Karanj plants. The plantations would contribute towards environment protection, prevention of soil erosion and provide feedstock for manufacturing bio-diesel. BPCL has promoted Bharat Renewable Energy Limited, a joint venture company with the objective of entering the Bio-diesel Value Chain in the state of Uttar Pradesh. "Project Triple One" has been launched with the aim of cultivating one million acres (404686.3 hectares) of wasteland, creating one million jobs and producing one million tonnes of Bio-diesel from the plantation to replace diesel over the next 10 years.

BPCL has been one of the first energy companies to successfully generate power through windmills. Windmills with a capacity of 5 MW (four windmills of 1.25 MW each) in the hilly range of Kappatguda in Karnataka are currently in operation and the power produced by them is being sold to Karnataka State Electricity grid. BPCL has plans to make further investments in windmills in the states of Rajasthan, Maharashtra, Gujarat and Madhya Pradesh.

Work is going on for the setting up of a 1 MW capacity grid connected solar farm at BPCLs LPG bottling plant in Lalru in the state of Punjab. As the power generated from the plant is proposed to be sold to the Punjab State Electricity Board, BPCL has signed a Power Purchase Agreement with the Board. The farm which will be spread across an area of 4 acres (1.62 hectares) has been conceived to avail of carbon emission credits under the Kyoto protocol.

A 5 KVA solar cum wind power generator has been commissioned at one of BPCLs Company Owned Company Operated (COCO) Retail Outlets near Kolkata. A 5 KVA solar power generator has also been installed at a COCO Outlet at Bangalore.

INDUSTRIAL RELATIONS

The overall Industrial Relations climate remained peaceful throughout the year. All organizational and employee related issues were handled with a collaborative approach and regular communication was ensured to all employees on all important issues affecting them and the Organisation. Discussions have been initiated with the Unions for signing a fresh wage settlement with them.

FULFILLMENT OF SOCIAL OBLIGATIONS

BPCL views Corporate Social Responsibility (CSR) as one of its core commitments to society at large. With BPCL committing 2% of the net profit of the previous financial year towards CSR, focus was placed on building a robust internal system for not only undertaking CSR projects, but also on effective management of the projects and evaluation of the outcome.

‘Education’ and ‘Water Conservation’ were the two core thrust areas although health, community development and environment conservation also remain important. For the first time, targets were set in the area of CSR in the Memorandum of Understanding that BPCL signs every year with the Ministry of Petroleum & Natural Gas. A target of making 4 villages ‘drought free’ through rainwater harvesting and also undertaking Computer Assisted Learning Programmes for 2500 children in 11 Zilla Parishad schools near Uran in Raigad Dist, Maharashtra has been agreed upon. These targets have been achieved and BPCL is now in constant communication with officials of the education department on sustaining the project, which can help in undertaking similar projects in the coming days. BPCL has also partnered with the NGO Pratham in rolling out a districtwide Education Enhance Programme in the districts of Nandurbar in Maharashtra and Sagar in Madhya Pradesh. Through this programme, BPCL plans to reach out to more than 1200 schools in both the districts, with an aim to ensure that every child in the district from class I to IV is able to read and write. BPCL is also supporting a programme to provide vocational guidance for the unemployed youth in these districts.

Apart from ensuring the successful implementation of the CSR projects, staff members were encouraged to join in the CSR efforts. The CSR projects received enthusiastic support from employee volunteers, who in their personal time, contributed towards water conservation projects, and also in teaching children from the lower socio-economic strata. The employees put in around 1921 volunteering hours. One of BPCLs employees has also accepted a two year assignment with an organization "Teach For India", in which he is teaching the children from the lower socio-economic strata, in a municipal school.

Several projects, which were being supported in remote rural and tribal areas, were socially audited on their impact for the first time, and the recommendations, which mostly dwelled on making beneficiaries self-reliant and empowering communities, have been acted upon.

PROMOTION OF SPORTS

BPCL sportspersons continued to excel in the national as well as international sports arena in several disciplines. Saina Nehwal reached a career high ranking of World no. 2 among ladies after winning the India Open GP Gold and the Singapore Super Series events. Saina went on to retain her title at the Indonesia Super Series event, which she had won in 2009 also. She was awarded the Padma Shri and Arjuna awards by the Government of India. Recently, she was named as the recipient of the Rajiv Gandhi Khel Ratna award which is the highest recognition accorded to an Indian sportsperson. Jwala Gutta won the Yonex Chinese Taipei Grand Prix Badminton tournament in the mixed doubles event. In Table Tennis, Poulomi Ghatak, who received the Arjuna Award, won a record 4 titles in the National Championships. In Chess, S. Kidambi became the fourth player from BPCL to earn the Grand Master norm. Joby Mathew won the Gold Medal in the World Arm Wrestling championships. BPCL continues to contribute significantly to the Indian contingents in various sporting disciplines.

BPCL was awarded the newly instituted "Excellence in Sports" trophy for its contribution in the field of sports. BPCL also bagged the II Runners-up "Presidents Trophy" based on the points obtained in various Petroleum Sports Promotion Board (PSPB) tournaments conducted during the year.

RESERVATION AND OTHER WELFARE MEASURES FOR SCHEDULED CASTES/SCHEDULED TRIBES/ OTHER BACKWARD CLASSES AND PERSONS WITH DISABILITIES

BPCL has been following in letter and spirit, the Presidential Directives and other Guidelines issued from time to time by the Ministry of Petroleum & Natural Gas, Ministry of Social Justice & Empowerment and the Department of Public Enterprises relating to reservations / concessions for Scheduled Castes / Scheduled Tribes / Other Backward Classes. Adequate monitoring mechanisms have been put in place for sustained and effective compliance uniformly across the Corporation. Rosters are maintained as per the Directives and are regularly inspected by the Liaison Officer of the Corporation as well as the Liaison Officer of the Ministry of Petroleum & Natural Gas, to ensure proper compliance of the Directives.

Students belonging to Scheduled Castes / Scheduled Tribes and those who are economically backward are encouraged by being awarded scholarships for pursuing courses at Industrial Training Institutes (ITI) & secondary school education up to graduation level.

BPCL also complies with provisions under "The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation), Act 1995" relating to providing employment opportunities and concessions for persons with disabilities. Special recruitment drives were conducted to fulfill the obligations in line with the provisions of employment opportunities.

Details relating to representation/appointment of Scheduled Castes / Scheduled Tribes / Other Backward Classes and Persons with Disabilities are enclosed as Annexure D.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Official Language Implementation Committees (OLIC) continue to function at the Corporate and Regional offices, Refineries and major locations in order to implement various provisions of the Official Language Act and Rules across the company. Keeping in view the Annual Programme issued by the Government of India, these Committees meet on a quarterly basis and take decisions with regard to implementation of Hindi and review the progress made. Several Hindi workshops were conducted. The Parliamentary Committee on Official Languages visited three locations while Corporate Hindi Cell inspected Kochi and Mumbai Refineries and three marketing locations. Rajyabhasha Vibhag of the Ministry of Home Affairs carried out inspections at two locations. All these Committees expressed their appreciation of the efforts taken by the Corporation.

The Hindi software "ISM V5 Office" was procured and installed in all offices of BPCL. "Hindi Software Training" programmes are also conducted in the Regional Offices and Refineries. An attractive Incentive Scheme is in vogue to further enhance Official Language implementation. Initiative has been taken to implement an e-library for Hindi books on the Corporate Intralink.

CITIZENS’ CHARTER

Citizens’ Charter - a tool for ensuring transparency in educating and communicating with the customers about their rights, apart from various infrastructure / services being available for the customers, is always in the forefront of all activities of the Company. Efforts are made to enhance customer service levels. The Grievance Redressal Mechanism was taken care of with well established systems at various consumer contact points. Besides, BPCL has sought to leverage technology by making available a feedback module in its website which the customer can have access to. An Internet based online Grievance Redressal Mechanism (Centralised Public Grievance Redress and Monitoring System) is helping in speedy redressal of grievances. BPCL has disposed off 231 grievances online during the year. BPCL has started toll free numbers so that customers can call from anywhere in the country for registration of complaints.

The Right to Information Act 2005 has been implemented in BPCL. People across the organization are familiar with the Act and BPCL has a unique single window concept for all replies under the Act. During the period ending 31st March, 2010, BPCL has received 1753 requests for information and only 67 cases were referred to the Chief Information Commissioner, New Delhi for review. No strictures have been passed against BPCL since the inception of the Act in 2005.

VIGILANCE

Corporate Vigilance in the Company has played a proactive role and initiated implementation of several system improvements and brought about simplification of procedures for achieving the best possible use of resources and for facilitating effective and speedy decision making in a transparent manner.

Vigilance Awareness Week was inaugurated by Justice B. Srikrishna and was observed from 3rd to 7th November, 2009 at all locations throughout the country. A Vendor Interaction Programme was organized at Kochi Refinery covering 90 vendors during Vigilance Awareness Week and issues raised were deliberated by the senior management. Such vendor meets have highlighted the company’s commitment to transparency and enabled the company to get feedback on the issues faced by vendors, improving interaction levels as well as contributing to confidence building and generation of greater levels of trust among all stakeholders. Under the aegis of Vigilance, an Integrity Club was started in Kochi Refinery School, which has received an excellent response.

More than 114 training workshops/seminars involving 1800 participants were held with the objective of enhancing Vigilance Awareness among the employees/vendors. Workshops on Dealerships / Distributorships were conducted at all regions covering 139 participants. As part of preventive vigilance activities, inspections including surprise inspections were done at 467 Retail Outlets, 161 LPG Distributorships and 167 locations including depots and installations. Based on the outcome of such inspections, preventive/administrative actions and system improvements were initiated.

To increase transparency in interface with vendors, contractors, suppliers and service providers, the coverage of tenders hosted on the corporate website has been increased to include tenders of Original Equipment Manufacturers and Proprietary items also. The Integrity Pact has been implemented for all tenders with value in excess of RuDees one crore.

SUBSIDIARY COMPANIES

Numaligarh Refinery Limited (NRL)

NRL was incorporated in 1993 with an authorized capital of Rs. 1,000 crores. It is a Mini Ratna company (Category I) and has a 3 MMTPA refinery at Numaligarh in Assam. BPCL holds 61.65% of the paid up equity in NRL as on 31st March, 2010. The refinery processed 2.62 MMT of crude oil during the year 2009-10 as compared to 2.25 MMT processed in the previous year. As on 31st March, 2010, the Refinery completed 8 years and 1 month of Lost Time Accident (LTA) free operations (equivalent to 1.40 crores man-hours) since the date of the last LTA. NRL achieved a turnover of Rs.7,874.09 crores for the financial year ending 31st March, 2010 which is lower than the turnover of Rs. 8,853.35 crores in 2008-09. The company’s profit after tax for the year stood at Rs.232.08 crores, as against profit after tax of Rs.235.64 crores in the previous year. The earnings per share (EPS) for the year 2009-10 amounted to Rs. 3.15 as against Rs. 3.20 in 2008-09. The Board of Directors of NRL have maintained the dividend by recommending a payout of Rs. 1.50 per share of Rs. 10 each. NRL had a net worth of Rs.2,450.04 crores and a book value of Rs.33.30 per share as at 31st March, 2010.

Bharat PetroResources Limited (BPRL)

BPRL was incorporated on 17th October, 2006 as a wholly owned subsidiary company of BPCL, with the objective of implementing BPCLs plans in the upstream exploration and production sector. The company has an authorized capital of Rs.1,000 crores. As on 31st March, 2010, the subscribed share capital of BPRL was Rs. 702.55 crores. The exploration and production activities of BPRL and its subsidiary companies extend to 26 exploration blocks where they hold participating interests (PI). Of this, 9 blocks are in India and 17 are abroad. Besides India, BPRL has blocks in Australia, Brazil, East Timor, Indonesia, Mozambique and the United Kingdom. BPRLs total acreage in all these blocks is around 81,000 sq.km, of which approx. 91% is offshore acreage. These blocks are in various stages of exploration.

During the year 2009-10, significant level of exploration activities were undertaken, particularly in Brazil and Mozambique. M/s. Anadarko Petroleum Corporation (Anadarko), the Operator of the offshore block in Brazil, has announced that the ‘Wahoo-1’ well in block BM-C-30 in the Campos Basin flowed at a test rate of approx. 7500 barrels per day of crude oil and approx. 4 million ft3 (0.11 million m3) per day of associated natural gas. The ‘Wndjammer’ well drilled during the first quarter of 2010 in Rovuma Basin, in the deep water offshore Mozambique, encountered huge quantities of gas in the wildcat well. The drilling of the balance wells in Mozambique is continuing.

BPRL had formed a wholly owned subsidiary company, Bharat PetroResources JPDA Limited (BPR-JPDA LTD) through which it holds a participating interest of 20% in

Block-JPDA 06-103-East Timor in the Joint Petroleum Development Area between Australia and East Timor. Further, BPRL has incorporated a wholly owned subsidiary company, BPRL International BV, Netherlands which in turn, has incorporated three wholly owned subsidiary companies viz. BPRL Ventures BV, BPRL Ventures Mozambique BV and BPRL Ventures Indonesia BV for undertaking exploration activities in various countries. BPRL Ventures BV has 50% stake in IBV (Brazil) Petroleo Limitada, which has participating interests ranging from 20% to 40% in 10 blocks in Brazil. BPRL Ventures Mozambique BV has participating interest of 10% in a block in Mozambique, and BPRL Ventures Indonesia BV holds participating interest of 12.50% in a block in Indonesia.

BPRL earned income of Rs.0.42 crores for the financial year ending 31st March, 2010 and had a loss of Rs.35.72 crores as compared to an income of Rs.4.87 crores and loss of Rs.13.93 crores for the financial year ending 31st March, 2009.

Annual Accounts of the Subsidiary Companies

In view of the dispensation granted by the Central Government under Section 212 (8) of the Companies Act, 1956, copies of the Balance Sheet, Profit and Loss Account, Directors’ Report and the Auditors’ Report of the Subsidiary Companies are not attached to the Balance Sheet of the Company. In compliance with the conditions of the dispensation, the Consolidated Financial Statements have been presented in the Annual Report and financial information of the Company’s subsidiaries, as required, is disclosed in the Annual Report as Annexure F to the Directors’ Report for information. The Audited Annual Accounts of the Subsidiary Companies and related detailed information are open for inspection by any Member at BPCLs Registered Office. Further, BPCL would make available / furnish these documents, on request, to any of its Members and the said documents would also be posted on BPCLs website.

JOINT VENTURE COMPANIES

Petronet LNG Limited (PLL)

PLL was formed in April, 1998 for importing LNG and setting up LNG terminals with facilities like jetty, storage, regasification etc. to supply natural gas to various industries in the country. The company was incorporated with an authorized share capital of Rs 1,200.00 crores. PLL was promoted by four public sector companies viz. BPCL, Indian Oil Corporation Limited (IOC), Oil & Natural Gas Corporation Limited (ONGC) & GAIL (India) Limited (GAIL). Each of the promoters holds 12.50% of the equity capital of PLL. The balance equity was raised over a period of time with Gaz de France having a 10% equity stake and Asian Development Bank holding 5.20% of the equity. The balance 34.80% is held by the public after the company had made an initial public offering in March, 2004. BPCLs equity investment in PLL currently stands at Rs.98.75 crores. As at 31st March, 2010, PLL had a net worth of Rs.2,234.86 crores with a book value of Rs. 29.80 per share.

The expansion of the regasification capacity at Dahej from 5 MMPTA to 10 MMTPA was commissioned in July 2009. The capacity is being further expanded to 12.50 MMTPA. The work on the green field terminal at Kochi has already commenced and the terminal is likely to be commissioned by December 2011.

PLL recorded a sales turnover of Rs. 10,602.94 crores in the financial year ending as on 31st March, 2010 as compared to Rs.8,428.70 crores recorded in 2008-09. The net profit for the year stood at Rs. 404.50 crores as compared to Rs.518.44 crores achieved in the previous year. Consequently, the EPS has declined from Rs. 6.91 in 2008-09 to Rs. 5.39 in 2009-10. PLL has maintained the dividend of 17.50% for the financial year 2009-10.

Indraprastha Gas Limited (IGL)

IGL, a Joint Venture Company with GAIL, was set up in December, 1998 with an authorized share capital of Rs. 220 crores for implementing the project for supply of Compressed Natural Gas (CNG) to the household and automobile sectors in Delhi. BPCL invested Rs.31.50 crores in IGL for a 22.50% stake in its equity. IGL has commissioned over 241 CNG Stations which supply the environment friendly fuel to more than 3,50,000 vehicles. IGL has more than 1,70,000 domestic PNG Customers and over 373 commercial customers in Delhi. The company is also extending its business to the towns of Greater Noida and Ghaziabad.

IGL registered a turnover of Rs. 1,213.13 crores and a profit after tax of Rs. 215.49 crores for the financial year ending as on 31st March, 2010 as compared to a turnover of Rs.962.14 crores and a profit after tax of Rs.172.47 crores during the previous year. IGL has declared a dividend of Rs. 4.50 per share against a dividend of Rs. 4.00 per share in the previous year. IGLs net worth was Rs. 825.48 crores with a book value of Rs.58.93 per share as at 31st March, 2010. The shares of the company are listed on the Stock Exchange, Mumbai and National Stock Exchange of India limited.

Sabarmati Gas Limited (SGL)

SGL, a Joint Venture Company promoted by BPCL and Gujarat State Petroleum Corporation (GSPC) was incorporated on 6th June 2006 with an authorized capital of Rs.100 crores for implementing the City Gas distribution project for supply of CNG to the household and automobile sectors in the city of Gandhinagar, Mehsana and Sabarkantha Districts of Gujarat.

Both the promoters have a stake of 25% each in the equity capital of SGL and the balance has been subscribed to by financial institutions. SGL has set up 13 CNG stations. SGL has achieved a turnover of Rs.297.91 crores and profit after tax of Rs. 27.72 crores for the financial year ending 31st March, 2010 against a turnover of Rs.260.45 crores and a Profit after tax of Rs.18.12 crores in the previous year. The company has proposed to maintain dividend on equity shares at the rate of 15% for the financial year ending 31st March, 2010.

Central UP Gas Limited (CUGL)

CUGL is a Joint Venture Company set up in March, 2005 with GAIL as the other partner, for implementing the project for supply of CNG to the household, industrial and automobile sectors in Kanpur and Bareilly in Uttar Pradesh. The company was incorporated with an authorized share capital of Rs. 60 crores. The joint venture partners have each invested Rs.15 crores in the joint venture, with each partner having an equity stake of 25% in the company. The balance equity share capital has been subscribed to by financial institutions including Asian Development Bank (ADB), Infrastructure Development Finance Company Limited (IDFC) and Infrastructure Leasing & Financial Services Limited (IL&FS). CUGL has set up 9 CNG stations. The company has commenced its PNG operations.

CUGL has achieved a turnover of Rs. 42.42 crores and profit of Rs. 7.19 crores for the financial year ending 31st March, 2010 as compared to turnover of Rs.35.64 crores and a profit of Rs.7.88 crores in the previous year. The EPS for the year stood at Rs. 1.26 as against Rs. 1.39 in 2008-09. The Board of Directors has recommended the payment of dividend at 3.50%, the same as last year.

Maharashtra Natural Gas Limited (MNGL)

MNGL was set up on 13th January, 2006 as a Joint Venture Company with GAIL for implementing the project for supply of CNG to the household and automobile sectors in Pune and its nearby areas. The company was incorporated with an authorized share capital of Rs. 100 crores. BPCL and GAIL have invested Rs. 22.50 crores each in MNGLs equity capital. The Maharashtra Government will hold a 5% stake in the company. MNGL has completed its financial closure by inducting IDFC, ILFS and Axis Bank as shareholders. The Company has set up 13 CNG stations till 31st March, 2010.

MNGL has achieved a turnover of Rs. 10.92 crores for the financial year ending 31st March, 2010 and loss of Rs. 1.56 crores for the year as against a turnover of Rs.1.48 crores and a loss of Rs.3.68 crores for the period 7th October, 2008 to 31st March , 2009.

Bharat Stars Services Private Limited (BSSPL)

BSSPL, a Joint Venture Company promoted by BPCL and ST Airport Pte Limited, Singapore was incorporated on 13th September, 2007 with an authorized capital of Rs.10 crores for providing into plane fuelling services at the new Bengaluru International Airport. The authorized share capital of BSSPL was subsequently enhanced to Rs. 20 crores.

The two promoters have each subscribed to 50% of the equity capital of BSSPL and BPCLs present investment stands at Rs.10 crores. The company, which commenced its operations at the new international airport in Bengaluru from May, 2008, has recently been issued the Letter of Award for implementing into plane fuelling services at the new T3 Terminal at Delhi International Airport. A new company Bharat Stars Services (Delhi) Private Limited is being formed for undertaking operations in Delhi. The company is also planning to enter Calicut Airport and other nearby airports and intends to set up Fixed Base Operations to augment its revenues.

BSSPL has achieved a turnover of Rs.2.90 crores for the financial year ending 31st March, 2010 and profit of Rs.0.64 crores as against a turnover of Rs.1.19 crores and a loss of Rs.0.33 crores in the previous year

Bharat Renewable Energy Limited (BREL)

BREL was incorporated on 17th June, 2008 for undertaking the production, procurement, cultivation and plantation of horticulture crops such as Karanj, Jatropha and Pongamia, trading, research and development and management of all crops and plantation including Biofuels in the state of Uttar Pradesh, with an authorized capital of Rs.30 crores. The company has been promoted by BPCL with Nandan Biomatrix Limited, Hyderabad and Shapoorji Pallonji Company Limited through their affiliate. Each of the partners will have an equal stake in the equity capital of the joint venture. The project envisages plantation of Jatropha in 1 million acres (404686.3 hectares) of marginal land which has the potential of generating employment / self employment for 1 million people and producing 1 million tonnes of Bio-diesel with an investment of Rs. 2,200 crores over the next 10-15 years.

The Government of Uttar Pradesh has approved the project under Jeevan Jyoti,’ a scheme of the Government which has the benefit of release of funds under the Mahatma Gandhi National Rural Employment Guarantee (MGNREG) scheme. BREL has identified 60,438 acres (24,459 hectares) of wasteland for plantation. Efforts are also being made to source saplings of Jatropha under the aegis of Bio Tech Park, Lucknow through approved nurseries and franchisees. Work is on for getting necessary approvals for the identified land and in preparing the land for plantation. BREL has earned miscellaneous income of Rs.0.08 crores for the financial year ending 31st March, 2010 and incurred loss of Rs.1.44 crores as against a miscellaneous income of Rs.0.05 crores and a loss of Rs.0.24 crores in the previous year.

Matrix Bharat Marine Services Pte Limited (MBMS)

MBMS is a Joint Venture Company incorporated in Singapore on 20th May, 2008 for carrying on the bunkering business and supply of marine lubricants in the Singapore market as well as international bunkering including expanding into Asian and Middle East markets. The company has been promoted by BPCL and Matrix Marine Fuels L.P USA, an affialiate of the Mabanaft group of companies, Hamburg, Germany. The authorised capital of the company is USD 4 million, which is equivalent to about Rs.20 crores. Both the partners have contributed equally to the share capital. Matrix Marine Fuels L.P USA has subsequently transferred their share and interest in the joint venture in favour of Matrix Marine Fuels Pte Limited, Singapore, another affiliate of the Mabanaft group.

The company has begun the ex-pipe bunkering operations in August, 2008. The company will also undertake development of international bunkering facilities at Indian ports, risk management including hedging activities, inventory management, and quality blending and freight optimization by utilizing the back haulage of time charter vessels for importing petroleum products in India. MBMS has achieved a turnover of USD 229.84 million and loss of USD 0.65 million for the financial year ending on 31st December, 2009 as compared to a turnover of USD 67.99 million and loss of USD 0.13 million for the year ending on 31st December, 2008.

Petronet India Limited (PIL)

BPCL has 16% equity participation with an investment of Rs.16 crores in PIL which was formed as a non-government financial holding company to give impetus to the development of pipeline networks throughout the country. PIL had facilitated pipeline access on a common carrier principle, through joint ventures for the pipelines put up by them viz Vadinar-Kandla, Kochi-Coimbatore-Karur and Mangalore-Hassan-Bangalore. PIL registered income of Rs. 0.41 crores and a net loss of Rs. 0.94 crores for the financial year ending 31st March, 2010 as against income of Rs. 0.52 crores and a net loss of Rs.27.06 crores (including provision for diminution of long term investment) in the previous year.

The new pipeline policy announced by the Government of India some time back has affected the future of the company as interested companies are permitted to undertake pipeline projects and PIL does not have any new projects in hand. As such, promoters and other investors in PIL have reached a conclusion that continuation of PIL would not be viable. Accordingly, the winding up process has been initiated and the process of divesting PIL’s 26% equity in the 3 Joint Venture Companies promoted by it is in progress. The Board of Directors of BPCL, in its meeting held in December 2006, accepted PILs offer to buy its 26% stake in the equity of Petronet CCK Limited where BPCL already holds 49% of the paid up share capital. This is awaiting receipt of approval of the Government of India.

Petronet CCK Limited (PCCKL)

BPCL has invested a sum of Rs. 49 crores for a 49% stake in the equity capital of PCCKL, a Joint Venture promoted with PIL with an authorized share capital of Rs.135 crores. The company owns the 292 km long multi-product Kochi-Karur pipeline from BPCL’s installation at Irimpanam to Karur for transportation of MS, HSD and SKO. The pipeline commenced commercial operations from September 2002.

The pumping volume during the year 2009-10 amounted to 1.72 MMT as against 1.57 MMT in the previous year. PCCKL registered a turnover of Rs.45.82 crores and net profit of Rs.4.40 crores for the financial year ending 31st March, 2010 as compared to a turnover of Rs.45.70 crores and loss of Rs.3.25 crores in the previous year. BPCL has initiated steps subject to completion of all formalities to purchase the 26% equity share of PIL in PCCKL.

Delhi Aviation Fuel Facility Pvt.Ltd

A new Joint Venture Company, Delhi Aviation Fuel Facility Private Limited, has been promoted by BPCL, IOCL and Delhi International Airport Limited (DIAL) for implementing Aviation Fuel Facility for the new T3 Terminal at Delhi International Airport, New Delhi. BPCL and IOCL will subscribe to 37% of the share capital of the joint venture while the balance will be held by DIAL. BPCLs onsite assets at the Delhi Airport will be transferred to the joint venture. Valuation of the assets is being done to determine the consideration for the transfer. The company has commenced operations from July 2010.

CONSERVATION OF ENERGY, TECHNOLOGICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The details regarding energy conservation, technology absorption and foreign exchange used and earned as required by Section 217(1)(e) of the Companies Act, 1956, are given in Annexure A.

MEMORANDUM OF UNDERSTANDING WITH MINISTRY OF PETROLEUM & NATURAL GAS

BPCL for the twenty-first successive year has entered into a Memorandum of Understanding (MOU) for the year 2010-11 with the Ministry of Petroleum & Natural Gas. BPCL has been achieving an "Excellent" performance rating since 1990-91. BPCL also has the distinction of winning the Prime Minister’s MOU Award for ‘Excellence in Performance’ for 1998-99, 2000-01, 2002-03 and 2006-07. BPCL was bestowed with the Prime Minister’s MOU Award for ‘Excellence in Performance’ for 2006-07 in October 2009.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)

Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is enclosed as Annexure C.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement and Department of Public Enterprises (DPE) Guidelines, the Report on Corporate Governance, together with the Auditors’ Certificate on compliance of Corporate Governance, is annexed as Annexure B. The Report also indicates the extent of BPCLs compliance of the Corporate Governance Voluntary Guidelines, 2009.

The forward looking statements made in the ‘Management Discussion and Analysis’ are based on certain assumptions and expectations of future events. The Directors cannot guarantee that these assumptions are accurate or these expectations will materialize.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of BPCL confirm that:

1. In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

2. The Company has selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as on 31st March 2010 and of the Profit and Loss Account of the Company for the year ended on that date.

3. The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. These Accounts have been prepared on a going concern basis.

DIRECTORS

Prof. A.H. Kalro resigned from the Board with effect from 28th January, 2010. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company’s business. Shri I.P.S. Anand and Shri Haresh M. Jagtiani were appointed as Additional Directors with effect from 28th January, 2010. Being Additional Directors, they hold office up to the date of the Annual General Meeting. The Company has received notices under Section 257 of the Companies Act, 1956 from Members proposing their name for appointment as Directors at the ensuing Annual General Meeting.

Shri T. Balakrishnan, Additional Chief Secretary, (I&C), Government of Kerala resigned from the Board w.e.f 29.6.2010 and the Directors have placed on record their appreciation of the valuable contributions made and guidance given by him for the development and progress of the Company’s business. Shri Alkesh Kumar Sharma, Secretary (IP), Government of Kerala was appointed as Additional Director on the Board w.e.f 30.6.2010. Being Additional Director, he holds office up to the date of the Annual General Meeting. The Company has received notice under Section 257 of the Companies Act, 1956 from a Member proposing his name for appointment as Director at the ensuing Annual General Meeting.

Smt. Rama Bijapurkar has tendered her resignation from the Board on 30.6.2010. The Directors have placed on record their appreciation of the valuable contributions made and guidance given by her for the development and progress of the Company’s business.

Prof. N. Venkiteswaran was reappointed on the Board w.e.f 16.7.2010. The Company has received notice under Section 257 of the Companies Act, 1956 from a Member proposing his name for appointment as Director at the ensuing Annual General Meeting.

Shri Ashok Sinha, Chairman & Managing Director has communicated to the Ministry of Petroleum & Natural Gas that he would be demitting office on the completion of his term of 5 years on 18th August, 2010.

Shri S.K. Joshi and Shri R.K. Singh, Directors, will retire by rotation at the ensuing Annual General Meeting as per the provisions of Section 256 of the Companies Act, 1956, and being eligible, offer themselves for re-appointment as Directors at the said Meeting. As required under the Corporate Governance Code, brief bio-data of the above Directors who are appointed / reappointed at the Annual General Meeting are provided in the Corporate Governance Report.

STATUTORY AUDITORS

M/s.B.K. Khare & Co., Chartered Accountants, Mumbai and K. Varghese & Co., Chartered Accountants, Kochi, were appointed as Statutory Auditors for the year 2009-10, by the Comptroller & Auditor General of India (C&AG), under the provisions of Section 619 (2) of the Companies Act, 1956. They will hold office till the ensuing Annual General Meeting. The said firms have also been appointed as the Statutory Auditors for the financial year 2010-11 by the C&AG.

ACKNOWLEDGEMENTS

The Directors wish to place on record their warm appreciation of the dedication and untiring efforts put in by BPCLs employees, without which the company would not have been able to achieve its goals and targets.

The Directors appreciate the support and patronage of BPCLs valued customers and are confident that the bond will strengthen further in the coming days.

The Directors acknowledge the assistance, guidance and support received from the various Ministries of the Government of India, particularly from the Ministry of Petroleum & Natural Gas, which has been of immense help in enabling BPCL to function efficiently.

The Directors thank BPCLs dealers, distributors, contractors and suppliers for their unstinting support and cooperation. The Directors also convey their sincere thanks to each and every shareowner of BPCL for their continued support.

For and on behalf of the Board of Directors

Sd/-

Mumbai Ashok Sinha

Date:10th August, 2010 Chairman & Managing Director

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