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Directors Report of Bharat Petroleum Corporation Ltd.

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

 
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