1. Summary Information

Country

India

Company Name

BHARAT PETROLEUM CORPORATION LIMITED

Principal Name 1

Mr. R. K. Singh

Status

Excellent

Principal Name 2

Mr. K. K. Gupta

Registration #

11-008931

Street Address

Bharat Bhawan, 4 and 6, Currimbhoy Road, Ballard Estate, Mumbai – 400 001, Maharashtra, India

Established Date

03.11.1952

SIC Code

--

Telephone#

91-22-22642112/ 22713000/ 004/ 22714000

Business Style 1

Manufacturing

Fax #

91-22-22642112/ 22616793/ 22713874

Business Style 2

--

Homepage

http://www.bharatpetroleum.com

Product Name 1

Petroleum Products

# of employees

13915 (Approximately)

Product Name 2

Benzene

Paid up capital

Rs. 3,615,400,000/-

Product Name 3

Lubricants

Shareholders

Promoter and Promoter Group - 54.93%

Public shareholding - 45.07%

Banking

State Bank of India

 

Public Limited Corp.

Yes

Business Period

61 Years

IPO

Yes

International Ins.

-

Public Enterprise

Yes

Rating

Aa (75)

Related Company

Relation

Country

Company Name

CEO

Subsidiaries

--

Bharat PetroResources Limited (BPRL)

--

Note

-

 

2. Summary Financial Statement

Balance Sheet as of

31.03.2012

(Unit: Indian Rs.)

Assets

Liabilities

Current Assets

210,100,600,000

Current Liabilities

262,884,600,000

Inventories

159,480,600,000

Long-term Liabilities

212,464,400,000

Fixed Assets

166,149,100,000

Other Liabilities

31,582,200,000

Deferred Assets

 

Total Liabilities

506,931,200,000

Invest& other Assets

120,339,500,000

Retained Earnings

145,523,200,000

 

 

Net Worth

149,138,600,000

Total Assets

656,069,800,000

Total Liab. & Equity

656,069,800,000

 Total Assets

(Previous Year)

559,953,500,000

 

 

P/L Statement as of

31.03.2012

(Unit: Indian Rs.)

Sales

2,119,729,700,000

Net Profit

13,112,700,000

Sales(Previous yr)

1,515,450,600,000

Net Profit(Prev.yr)

15,466,800,000

 

 

MIRA INFORM REPORT

 

 

Report Date :

22.03.2013

 

IDENTIFICATION DETAILS

 

Name :

BHARAT PETROLEUM CORPORATION LIMITED

 

 

Registered Office :

Bharat Bhawan, 4 and 6, Currimbhoy Road, Ballard Estate, Mumbai – 400 001, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2012

 

 

Date of Incorporation :

03.11.1952

 

 

Com. Reg. No.:

11-008931

 

 

Capital Investment / Paid-up Capital :

Rs.3615.400 Millions

 

 

CIN No.:

[Company Identification No.]

L23220MH1952GOI008931

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMB00573G

MUMB12464E

 

 

PAN No.:

[Permanent Account No.]

AAACB2902M

 

 

Legal Form :

A Public Limited Liability company. The Company’s shares are Listed on The Stock Exchange.

 

 

Line of Business :

Manufacturing of Petroleum Products, Benzene and Lubricants.

 

 

No. of Employees :

13915 (Approximately)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa (75)

 

RATING

STATUS

PROPOSED CREDIT LINE

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

 

Maximum Credit Limit :

USD 600000000

 

 

Status :

Excellent

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established and a reputed company having a fine track record. Financial position of the company appears to be sound. Trade relations are reported as trustworthy. Business is active .Payments are reported to be regular and as per commitments.

 

The company can be considered excellent for business dealings at usual trade terns and conditions.

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

INDIAN ECONOMIC OVERVIEW

 

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

 

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

CRISIL

Rating

LONG TERM RATING : CRISIL AAA

Rating Explanation

Higher degree of safety and lowest credit risk

Date

13.09.2012

 

Rating Agency Name

CRISIL

Rating

SHORT TERM RATING : CRISIL A1+

Rating Explanation

Very strong degree of safety and lowest credit risk

Date

13.09.2012

 

 

RBI DEFAULTERS’ LIST STATUS

 

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

 

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

 

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

 

LOCATIONS

 

Registered Office :

Bharat Bhawan, 4 and 6, Currimbhoy Road, Ballard Estate, Mumbai – 400 001, Maharashtra, India

Tel. No.:

91-22-22642112/ 22713000/ 004/ 22714000

Fax No.:

91-22-22642112/ 22616793/ 22713874

E-Mail :

okesy@bharatpetroleum.com

dixitns@bharatpetroleum.in

balasubramanian@bharatpetroleum.in

Website :

http://www.bharatpetroleum.com

 

 

Factory  :

Lubricant Plant

Wadilube Installation, Mallet Road, Mumbai – 400009, Maharashtra, India

 

24, Parganas, Budge-Budge 743 319

 

 

 Refinery :

Bharat Petroleum Refinery, Mahul, Chembur, Mumbai - 400074, Maharashtra, India

Tel. No.:

91-22-25543151

Fax No.:

91-22-25542970

 

 

Delhi Co-ordination Office:

ECE House, Post Box No.7, Connaught Circus, New Delhi 110001, India

Tel. No.:

91-11-23316891

Fax No.:

91-11-23316894

 

 

Retail Business Head Quarters : 

Maker Towers E and F, 12th Floor, Cuffe Parade, Mumbai 400005, Maharashtra, India

Tel. No.:

91-22-22189172

Fax No.:

91-22-22182304

 

 

Lubricants Business Head Quarters :

Bharat Bhavan-II,  Ballard Estate,  Mumbai – 400001, Maharashtra, India

Tel. No.:

91-22-22713000/ 22714000

Fax No.:

91-22-22713801/ 25542970

 

 

Aviation Business Head Quarters : 

Plot Nos. A 5 and 6, Sector 1, Noida 201301, District Gautam Budh Nagar, Uttar Pradesh, India

Tel. No.:

91-120-24539155/ 24744820

 

 

LPG Business Head Quarters:  

Bharat Bhavan, 4 and 6 Currimbhoy Road, Ballard Estate, Mumbai - 400001, Maharashtra, India

Tel. No.:

91-22-22713000
91-22-22714000

Fax No.:

91-22-22832646

 

 

Industrial and Commercial Business Head Quarters : 

Bharat Bhavan, 4 and 6 Currimbhoy Road, Ballard Estate, Mumbai 400001,Maharashtra, India

Tel. No.:

91-22-22713000
91-22-22714000

Fax No.:

91-22-22713671

 

 

Chief Vigilance Officer:

Bharat Bhavan-1, 4 and 6, Currimbhoy Road, Ballard Estate, Mumbai-400074, Maharashtra, India

Tel. No.:

91-22-22713610

Fax No.:

91-22-22713611

 

 

DIRECTORS

 

As on 31.03.2012

 

Name :

Mr. R. K. Singh

Designation :

Chairman and Managing Director (w.e.f 09.12.2010)

 

 

Name :

Mr. K. K. Gupta

Designation :

Director (Marketing) (w.e.f. 31.03.2011)

 

 

Name:

Mr. S.K. Joshi

Designation:

Director (Finance)

Qualification :

ACA, MBA

 

 

Name :

Mr. B. K. Datta

Designation :

Director (Refineries) (w.e.f. 01.08.2011)

  

 

Name:

Mr. S.K. Barua

Designation:

Director

 

 

Name :

I.P.S. Anand

Designation :

Director

 

 

Name:

Mr. S. Mohan

Designation:

Director (Human Resources) (up to 31.10.2011)

  

 

Name:

Mr. Haresh M. Jagtiani

Designation:

Director

  

 

Name:

Mr. N. Venkiteswaran

Designation:

Director

 

 

Name:

Mr. S. Varadarajan

Designation:

Director (Finance) (w.e.f. 1.9.2011)

 

 

Name :

R. N. Choubey

Designation :

Director General DGH, MOP & NG (w.e.f. 10.8.2012)

 

 

Name:

J. R. Varma

Designation:

Director (W.E.F. 10.8.2012)

  

 

Name:

B. Chakrabarti

Designation:

Director (W.E.F. 10.8.2012)

  

 

Name:

S. P. Gathoo

Designation:

Director (Human Resources) (w.e.f 3.11.2011)

 

 

KEY EXECUTIVES

 

Name :

Mr. P. K. Sinha

Designation :

Special Secretary & Financial Advisor, MOP & NG (Up To 28.2.2012)

 

 

Name :

Mr. A. K. Sharma

Designation :

Secretary (IP) Government Of Kerala

 

 

Name :

Mr. S.M. Misra

Designation :

Chief Vigilance Officer

 

 

Name :

Mr. A. K. Bansal

Designation :

Executive Director (Gas)

 

 

Name :

Mr. Anurag Deepak

Designation :

Executive Director (Pipelines)

 

 

Name:

Mr. D.M. Reddy

Designation:

Executive Director (Industrial and Commercial)

 

 

Name:

Ms. Dipti Sanzgiri

Designation:

Executive Director (Human Resources Development)

 

 

Name:

Mr. George Paul

Designation:

Executive Director (LPG)

 

 

Name:

Mr. G.S. Wankhede

Designation:

Executive Director (Logistics) Retail

 

 

Name:

Mr. I. Srinivas Rao

Designation:

Executive Director (Gas)

 

 

Name :

Mr. John Minu Mathew

Designation :

Executive Director (Technical), Kochi Refinery

 

 

Name :

Mr. K.V. Shenoy

Designation :

Executive Director (Retail) South

 

 

Name :

Mr. M.M. Chawla

Designation :

Executive Director (Projects), E&P

 

 

Name :

Mr. P. Balasubramanian

Designation :

Executive Director (Corporate Finance)

 

 

Name :

Mr. P. C. Srivastava

Designation :

Executive Director (Lubes)

 

 

Name :

Mr. P.S. Bhargava

Designation :

Executive Director (Planning)

 

 

Name :

Mr. P. Padmanabhan

Designation :

Executive Director (Refineries Coordination)

 

 

Name :

Mr. R.K. Mehra

Designation :

Executive Director (International Trade)

 

 

Name :

Mr. R.M. Gupta

Designation :

Executive Director (LPG)

 

 

Name :

Mr. R.P. Natekar

Designation :

Executive Director (Finance) Retail

 

 

Name :

Mr. S.B. Bhattacharya

Designation :

Executive Director (Aviation)

 

 

Name :

Mr. S. Krishnamurti

Designation :

Executive Director (Corporate Affairs)

 

 

Name :

Mr. S. P. Mathur

Designation :

Executive Director (Engineering and Projects)

 

 

Name :

Mr. S. Ramesh

Designation :

Executive Director (Lubes)

 

 

Name :

Ms. Sumita Bose Roy

Designation :

Executive Director (Audit)

 

 

Name :

Mr. T. Somanath

Designation :

Executive Director (Human Resources Services)

 

 

Name :

Mr. U.N. Joshi

Designation :

Executive Director (Planning & Infrastructure)

 

 

Name :

Mr. Arjun Hira

Designation :

General Manager (Brand and ARB) RHQ

 

 

Name :

Mr. A.K. Kaushik

Designation :

General Manager (IS - Infrastructure and Services)

 

 

Name :

Mr. Arun Singh

Designation :

Chief Procurement Officer

 

 

Name :

Mr. B.C. Roy

Designation :

General Manager (Audit)

 

 

Name :

Mr. Brij Pal Singh

Designation :

General Manager (Marketing Corporate)

 

 

Name :

Mr. G. Kalaiselvan

Designation :

General Manager (Internal Coaching)

 

 

Name :

Mr. Gautam Mukerji

Designation :

General Manager (Coordination)

 

 

Name :

Mr. E.A. Vimalnathan

Designation :

General Manager (Supplies & Distribution) Retail HQ

 

 

Name :

Mr. J. Dinaker

Designation :

(Corporate Treasury)

 

 

Name :

Mr. J.R. Akut

Designation :

General Manager (IIS Technology)

 

 

Name :

Mr. K. H. Subramanian

Designation :

General Manager (Retail) West

 

 

Name :

Mr. K.B. Narayanan

Designation :

General Manager (ERP - CC)

 

 

Name :

Mr. K. Padmakar

Designation :

General Manager (Corporate HRS)

 

 

Name :

Mr. K. N. Ravindran

Designation :

General Manager (Projects), Kochi Refinery

 

 

Name :

Mr. K. Sivakumar

Designation :

General Manager (Corporate Finance)

 

 

Name :

Mr. K.P. Chandy

Designation :

General Manager (Sales) LPG HQ

 

 

Name :

Mr. M.D. Agrawal

Designation :

General Manager (IS), Mumbai Refinery

 

 

Name :

Mr. M.M. Somaya

Designation :

General Manager (Brand and Public Relations)

 

 

Name :

Mr. M.P. Govindarajan

Designation :

General Manager (Human Resources), Kochi Refinery

 

 

Name :

Mr. M. Prasanna Kumar

Designation :

General Manager (Planning & Project Coordination)

 

 

Name :

Ms. Madhu Sagar

Designation :

General Manager (Employee Satisfaction Enhancement)

 

 

Name :

Ms. Monica Widhani

Designation :

General Manager (Urban Retailing)

 

 

Name :

Mr. P. Anandasundaresan

Designation :

General Manager (Sales) I and C, Mumbai

 

 

Name :

Mr. P.K. Bhatnagar

Designation :

General Manager (Finance) LPG HQ

 

 

Name :

Mr. P. Kumaraswamy

Designation :

General Manager (Projects)

 

 

Name :

Mr. Pramod Sharma

Designation :

General Manager (Retail) North

 

 

Name :

Mr. Prasad K. Panicker

Designation :

General Manager (Operations), Mumbai Refinery

 

 

Name :

Mr. P.V. Kumar

Designation :

General Manager (International Trade)

 

 

Name :

Mr. R. Chaturvedi

Designation :

General Manager (Retail) East

 

 

Name :

Mr. R. Rajamani

Designation :

Executive Assistant to C&MD

 

 

Name :

Mr. S.K. Agrawal

Designation :

General Manager (Legal)

 

 

Name :

Mr. S.K. Goel

Designation :

General Manager (Technical), Mumbai Refinery

 

 

Name :

Mr. Sharad K. Sharma

Designation :

General Manager Sales (Retail) HQ

 

 

Name :

Mr. Sudhir K. Malik

Designation :

General Manager (Sales) I&C, Mumbai

 

 

Name :

Ms. Sujata N. Chogle

Designation :

General Manager (Human Resources) Retail

 

 

Name :

Mr. S.S. Sunderajan

Designation :

General Manager (Operations), Mumbai Refinery

 

 

Name :

Mr. S. Vijayakumar

Designation :

General Manager (Human Resources), Mumbai Refinery

 

 

Name :

Mr. S.V. Kulkarni

Designation :

Company Secretary

 

 

Name :

Mr. Tapan Datta

Designation :

General Manager (Vigilance), CO

 

 

Name :

Mr. Thomas Chacko

Designation :

General Manger (Engineering and Advisor Services) Kochi Refinery

 

 

Name :

Mr. Thomas Zachariah

Designation :

General Manger (Engineering and Advisor Services) Kochi Refinery

 

 

Name :

Mr. Tomy Mathews

Designation :

General Manager (Technical), Kochi Refinery

 

 

Name :

Mr. Tomy Mathews

Designation :

General Manager (Operations), Kochi Refinery

 

 

Name :

Dr. U.V. Girish Kumar

Designation :

General Manager (IT and BI), Retail HQ

 

 

Name :

Mr. V. Anand

Designation :

General Manager (Sales Strategy), Retail HQ

 

 

Name :

Mr. V. Anand

Designation :

General Manager (Sales Strategy), Retail HQ

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 31.12.2012

 

Category of Shareholder

No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

http://www.bseindia.com/images/clear.gif(1) Indian

 

 

http://www.bseindia.com/images/clear.gifCentral Government / State Government(s)

397200120

54.93

http://www.bseindia.com/images/clear.gifSub Total

397200120

54.93

http://www.bseindia.com/images/clear.gif(2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

397200120

54.93

(B) Public Shareholding

 

 

http://www.bseindia.com/images/clear.gif(1) Institutions

 

 

http://www.bseindia.com/images/clear.gifMutual Funds / UTI

64637430

8.94

http://www.bseindia.com/images/clear.gifFinancial Institutions / Banks

1129016

0.16

http://www.bseindia.com/images/clear.gifCentral Government / State Government(s)

6222222

0.86

http://www.bseindia.com/images/clear.gifInsurance Companies

56519509

7.82

http://www.bseindia.com/images/clear.gifForeign Institutional Investors

72592804

10.04

http://www.bseindia.com/images/clear.gifSub Total

201100981

27.81

http://www.bseindia.com/images/clear.gif(2) Non-Institutions

 

 

http://www.bseindia.com/images/clear.gifBodies Corporate

35573514

4.92

http://www.bseindia.com/images/clear.gifIndividuals

 

 

http://www.bseindia.com/images/clear.gifIndividual shareholders holding nominal share capital up to Rs.0.100 million

15859694

2.19

http://www.bseindia.com/images/clear.gifIndividual shareholders holding nominal share capital in excess of Rs.0.100 million

2600993

0.36

http://www.bseindia.com/images/clear.gifAny Others (Specify)

70748946

9.78

http://www.bseindia.com/images/clear.gifNon Resident Indians

544020

0.08

http://www.bseindia.com/images/clear.gifClearing Members

2747452

0.38

http://www.bseindia.com/images/clear.gifTrusts

67457474

9.33

http://www.bseindia.com/images/clear.gifSub Total

124783147

17.26

Total Public shareholding (B)

325884128

45.07

Total (A)+(B)

723084248

100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

0

0.00

http://www.bseindia.com/include/images/clear.gif(1) Promoter and Promoter Group

0

0.00

http://www.bseindia.com/include/images/clear.gif(2) Public

0

0.00

http://www.bseindia.com/include/images/clear.gifSub Total

0

0.00

Total (A)+(B)+(C)

723084248

0.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of Petroleum Products, Benzene and Lubricants.

 

 

Products :

PRODUCT DESCRIPTION

ITEM CODE NO.

Petroleum Products

2710

Benzene

2902

Lubricants

2710

 

 

PRODUCTION STATUS AS ON 31.03.2011

 

Particulars

Licensed Capacity

Installed Capacity

Actual Production

(a) Fuel refinery

 

 

 

(i) In million metric tonnes p.a.

NA

21.50

21.78

(ii) Production in kilolitres (KL)

--

--

8668482

Light distillates

--

--

13781044

Middle distillates

--

--

3046601

Others

 

 

 

(b) Aromatics (in MT)

 

 

 

(i) Benzene *

185500

192900

75156

(ii) Toluene *

67600

73100

20282

(iii) Mixed Aromatic Solvent

15000

15000

--

(c) MTBE in M.T. #

NA

30000

27584

(d) New Solvent Unit

 

 

 

(i) Solvent (SBP 55-115) in M.T.

NA

40000

9992

(ii) Solvent (Food Grade Hexane) in M.T.

NA

25000

29257

(e) Poly Proplyene Feedstock in M.T.

NA

60000

58127

(f) Lubricants in M.T.

NA

153400

220387

(g) Lube Oil Base Stock (LOBS) in M.T.

NA

180000

205373

(h) Sulphur in M.T.

NA

117667

70228

(i) Natural Rubber Modified Bitumen in M.T.

NA

65000

7598

(j) Bitumen Emulsion (Single Shift) in M.T.

50000

27600

5310

(k) Diesel Additive (Single Shift) in M.T.

5000

1500

--

(l) Propylene in M.T.

65000

50000

16067

(m) Petroleum Hydrocarbon Solvent in M.T.

10000

8820

7261

(n) Poly Iso Butene in M.T.

5000

5000

1074

(o) Cable Jelly (Poly Isobutene Unit) in M.T.

6500

2500

--

(p) Others (Poly Isobutene Unit) in M.T.

14000

1000

--

 

Note :

* For Kochi Refinery, the combined capacity of Benzene and Toluene is 99200 MT as against the individual capacity of 87200 MT and 50000 MT respectively

@ The blending capacities have been reviewed during the year and have been reworked in line with current usage pattern which is depending on the market requirement.

# MTBE is used for own manufacture of Motor Spirit

 

 

GENERAL INFORMATION

 

No. of Employees :

13915 (Approximately)

 

 

Bankers :
  • State Bank of India
  • Union Bank of India
  • Corporation Bank
  • Bank of India
  • State Bank of Patiala
  • Central Bank of India
  • Deutsche Bank
  • Standard Chartered Bank
  • Royal Bank of Scotland
  • ICICI Bank Limited
  • HDFC Bank Limited
  • State Bank of Travancore
  • IDBI Bank Limited
  • BNP Paribas
  • Calyon Bank

 

 

Facilities :

 

Secured Loan

 

As on 31.03.2012

(Rs. In Millions)

Debentures

 

 

Working Capital Loans / Cash Credit

Secured in favour of the participating banks ranking pari passu inter-alia by hypothecation of raw materials, finished goods, stock- in- process, book debts, stores, components and spares and all movables both present and future.

 

2101.100

Total

 

2101.100

 

 

Secured Loan

 

As on 31.03.2011

(Rs. in Millions)

Debentures

10.35% Secured Non-Convertible debenture 2010

 [Due for repayment within one year Rs.10000.000 millions (previous year Rs. NIL)]

 

0.000

7.73% Secured Non-Convertible debenture 2012

 

10000.000

6.23% Secured Non-Convertible debenture 2011

 

10000.000

Banks

Working Capital Loans/Cash Credit

(Secured in favour of the participating banks ranking pari passu inter-alia by hypothecation of raw materials, finished goods, stock- in- process, book debts, stores, components and spares and all movables both present and future)

 

20215.500

Interest accrued and due

 

115.500

Term Loan

[Due for repayment within one year Rs.12000.000 millions (previous year Rs. NIL)]

[Secured by pledge of 6.35% Oil Marketing Companies GOI Special Bonds 2024 of Rs.30000.000 millions]

 

0.000

Collateralised Borrowing and Lending Obligation (CBLO) through Clearing Corporation of India Limited

[Secured by Oil Marketing Companies GOI Special Bonds 2024 of Rs.14000.000 millions (previous year Oil Marketing Companies GOI Special Bonds 2023 of

Rs.13000.000 millions)]

 

0.000

Total

 

40331.000

 

 

 

Banking Relations :

--

 

 

Auditor 1 :

 

Name :

B. K. Khare and Company

Chartered Accountants

 

 

Auditor 2 :

 

Name :

K. Varghese and Company

Chartered Accountants

 

 

Joint Venture Companies :

  • Indraprastha Gas Limited
  • Petronet India Limited
  • Petronet CCK Limited
  • Petronet CI Limited
  • Petronet LNG Limited
  • Bharat Oman Refineries Limited
  • Petroleum Infrastructure Limited
  • Maharashtra Natural Gas Limited
  • Central UP Gas Limited
  • Sabarmati Gas Limited
  • Bharat Stars Services Private Limited
  • Bharat Renewable Energy Limited
  • Matrix Bharat Pte. Limited
  • Delhi Aviation Fuel Facility Private Limited
  • IBV (Brazil) Petroleo Pvt Ltda.
  • Petroleum India International

 

 

 

CAPITAL STRUCTURE

 

After 21.09.2012

 

Authorised Capital : Rs.25000.000 Millions

 

Issued, Subscribed & Paid-up Capital : Rs.7230.842 Millions

 

As on 31.03.2012

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

450000000

Equity Shares

Rs.10/- each

Rs.4500.000 Millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

361542124

Equity Shares

Rs.10/- each

Rs.3615.400 Millions

 

 

 

 

 

Notes:

 

The Corporation has only one class of shares namely equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Corporation, the holders of equity shares will be entitled to receive the remaining assets of the Corporation in proportion to the number of equity shares held.

 

The Corporation declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

 

During the year ended 31st March 2012, the amount of dividend per share is ` 11 (previous year ` 14). The total dividend appropriation for the year ended 31st March 2012 amounted to ` 454.86 crores (previous year ` 577.24

crores) including Corporate Dividend Tax of ` 57.16 crores (previous year ` 71.08 crores)

 

The Corporation has not issued or bought back any shares during the year and accordingly there is no change in the share capital.

 

Shareholders holding more than 5% shares

 

Name of shareholder

31.03.2012

 

% Holding

No. of shares

Government of India

54.93

19,86,00,060

BPCL Trust for Investment in shares

9.33

3,37,28,737

Life Insurance Corporation of India

6.820

2,45,86,734

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2012

31.03.2011

31.03.2010

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

3615.400

3615.400

3615.400

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

145523.200

136960.800

127251.700

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

149138.600

140576.200

130867.100

LOAN FUNDS

 

 

 

1] Secured Loans

2101.100

40331.00

104438.700

2] Unsecured Loans

210363.300

149387.700

117513.300

TOTAL BORROWING

212464.400

189718.700

221952.000

DEFERRED TAX LIABILITIES

14005.600

10075.400

8593.000

 

 

 

 

TOTAL

375608.600

340370.300

361412.100

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

166149.100

159993.300

136693.500

Capital work-in-progress

11165.300

10122.300

25177.500

 

 

 

 

INVESTMENT

109174.200

113779.600

122013.200

ADVANCE FOR INVESTMENT

0.000

0.000

13000.100

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
159480.600
153750.800
120288.600

 

Sundry Debtors
63783.400
26644.200
26626.800

 

Cash & Bank Balances
9788.500
3799.700
3423.600

 

Other Current Assets
94065.600
55510.700
37856.900

 

Loans & Advances
42463.100
36352.900
47643.400

Total Current Assets
369581.200
276058.300
235839.300

Less : CURRENT LIABILITIES & PROVISIONS
 
 
 

 

Sundry Creditors

127899.100
109394.700
83599.700

 

Other Current Liabilities
134985.500
78488.200
61905.900

 

Provisions
17576.600
31700.300
25805.900

Total Current Liabilities
280461.200
219583.200
171311.500

Net Current Assets
89120.000
56475.100
64527.800

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

375608.600

340370.300

361412.100

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2012

31.03.2011

31.03.2010

 

SALES

 

 

 

 

 

Income

2119729.700

1515450.600

1222759.500

 

 

Other Income

17017.800

17549.700

22402.400

 

 

TOTAL                                     (A)

2136747.500

1533000.300

1245161.900

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Purchase of products and crude oil for resale

1121591.500

781051.000

630788.900

 

 

Raw materials consumed

855629.700

627304.000

505924.500

 

 

Packages consumed

--

1392.800

1331.700

 

 

Excise Duty on Inventory differential

--

626.700

2174.000

 

 

Taxes and Other Levis

--

6442.100

18415.600

 

 

Transportation

--

28548.000

25854.700

 

 

Consumption of stores, spares and materials

--

532.500

795.200

 

 

Power & Fuel Cost

--

4758.900

2371.200

 

 

Employees' remuneration and other benefits

--

28028.500

21411.200

 

 

Other operating and administration expenses

--

23087.100

29245.900

 

 

Increase/(Decrease) in Inventory

(6016.000)

(20560.500)

(39898.500)

 

 

Employee Benefits Expenses 

22610.700

--

--

 

 

Other Expenses

87245.300

--

--

 

 

Prior Period Income/ (Expenses) net

--

100.900

554.300

 

 

TOTAL                                     (B)

2081061.200

1481312.000

1198968.700

 

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)     (C)

55686.300

51688.300

46193.200

 

 

 

 

 

Less

INTEREST                                                         (D)

17995.900

11007.800

10109.500

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

37690.400

40680.500

36083.700

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

18848.700

16554.000

12423.200

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                              (G)

18841.700

24126.500

23660.500

 

 

 

 

 

Less

TAX                                                                  (H)

5729.000

8659.700

8284.300

 

 

 

 

 

 

PROFIT AFTER TAX (G-H)                                (I)

13112.700

15466.800

15376.200

 

 

 

 

 

 

Transfer from / (to) Debenture Redemption Reserve

0.000

0.000

(7000.000)

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

5000.000

1810.600

763.700

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Proposed dividend

3977.000

5061.600

5061.600

 

 

Corporate Dividend Tax on proposed dividend

571.600

710.800

727.700

 

 

Transfer to General Reserve

8564.100

6505.000

1540.000

 

BALANCE CARRIED TO THE B/S

5000.000

5000.000

1810.600

 

# Rs. 10,000.00

 

 

 

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Exports on FOB basis

193156.100

123803.700

103013.500

 

TOTAL EARNINGS

193156.100

123803.700

103013.500

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials (including Crude Oil)

687842.900

443216.100

363977.900

 

 

Capital goods

1482.900

1239.800

3221.500

 

 

Components and spare parts (including packages, chemicals and catalysts)

539.500

441.800

1536.900

 

TOTAL IMPORTS

689865.300

444897.700

368736.300

 

 

 

 

 

 

Earnings Per Share (Rs.)

36.27

42.78

42.53

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2012

30.09.2012

31.12.2012

Type

1st Quarter

2nd Quarter

3rd Quarter

 

UnAudited

UnAudited

UnAudited

Net Sales

545484.200

568878.700

623687.400

Total Expenditure

626983.800

514998.500

600814.300

PBIDT (Excl OI)

(81499.600)

53880.200

22873.100

Other Income

3138.200

4567.800

4017.800

Operating Profit

(78361.400)

58448.000

26890.900

Interest

5204.800

4117.300

5758.400

Exceptional Items

0.000

0.000

0.000

PBDT

(83566.200)

54330.700

21132.500

Depreciation

4801.300

3982.800

4656.800

Profit Before Tax

(88367.500)

50347.900

16475.700

Tax

0.000

0.000

0.000

Provisions and contingencies

0.000

0.000

0.000

Profit After Tax

(88367.500)

50347.900

16475.700

Extraordinary Items

0.000

0.000

0.000

Prior Period Expenses

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

Net Profit

(88367.500)

50347.900

16475.700

 

 

 

KEY RATIOS

 

 

PARTICULARS

 

 

31.03.2012

31.03.2011

31.03.2010

PAT / Total Income

(%)
0.61
1.01
1.23

 

 
 
 
 

Net Profit Margin

(PBT/Sales)

(%)
0.89
1.59
1.94

 

 
 
 
 

Return on Total Assets

(PBT/Total Assets}

(%)
3.52
5.53
6.35

 

 
 
 
 

Return on Investment (ROI)

(PBT/Networth)

 
0.13
0.17
0.18

 

 
 
 
 

Debt Equity Ratio

(Total Debt/Networth)

 
1.42
1.35
1.70

 

 
 
 
 

Current Ratio

(Current Asset/Current Liability)

 
1.32
1.26
1.38

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Sr. No.

Check List by Info Agents

Available in Report (Yes / No)

1]

Year of Establishment

Yes

2]

Locality of the firm

Yes

3]

Constitutions of the firm

Yes

4]

Premises details

No

5]

Type of Business

Yes

6]

Line of Business

Yes

7]

Promoter's background

No

8]

No. of employees

Yes

9]

Name of person contacted

No

10]

Designation of contact person

No

11]

Turnover of firm for last three years

Yes

12]

Profitability for last three years

Yes

13]

Reasons for variation <> 20%

--

14]

Estimation for coming financial year

No

15]

Capital in the business

Yes

16]

Details of sister concerns

Yes

17]

Major suppliers

No

18]

Major customers

No

19]

Payments terms

No

20]

Export / Import details (if applicable)

No

21]

Market information

--

22]

Litigations that the firm / promoter involved in

--

23]

Banking Details

Yes

24]

Banking facility details

Yes

25]

Conduct of the banking account

--

26]

Buyer visit details

--

27]

Financials, if provided

Yes

28]

Incorporation details, if applicable

Yes

29]

Last accounts filed at ROC

Yes

30]

Major Shareholders, if available

Yes

31]

Date of Birth of Proprietor/Partner/Director, if available

No

32]

PAN of Proprietor/Partner/Director, if available

No

33]

Voter ID No of Proprietor/Partner/Director, if available

No

34]

External Agency Rating, if available

Yes

 

DETAILS OF UNSECURED LOANS

(Rs. In Millions)

Particulars

 

31.03.2012

 

 

 

Loan from Oil Industry Development Board

 

4965.000

External Commercial Borrowings 

 

16625.900

From banks

 

 

Rupee Loans

 

2000.000

Foreign Currency Loans

 

186772.400

Total

 

210363.300

(Rs. In Millions)

Particulars

 

31.03.2011

 

Fixed deposits

[Due for repayment within one year Rs.2.400 millions (previous year Rs.30.100 millions)]

 

0.000

Short Term (From Banks)

Rupee Loans

 

 

    10900.000

Foreign Currency Loans

 

106981.400

Syndicated Loans from various banks (repayable in foreign currency)

[Due for repayment within one year Rs. NIL (previous year Rs.6060.700 millions)]

 

22788.800

Others

Oil Industry Development Board

[Due for repayment within one year Rs.1266.300 millions (previous year Rs.2031.300 millions)]

 

8717.500

Total

 

149387.700

 

COMPANY PERFORMANCE

 

BPCL's revenue from operations for the year 2011-12 stood at Rs.2225004.700 Millions reflecting an increase of 36.24% over the previous year when the Company's revenues from operations amounted to Rs.1633126.000 Millions. 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.18841.700 Millions as compared to Rs.23948.900 Millions in 2010-11. After providing for tax, (including deferred tax) of Rs.5729.000 Millions as against Rs.8482.100 Millions during the last year, the profit after tax for the year stood at Rs.13112.700 Millions as against Rs.15466.800 Millions recorded in 2010-11.

 

The Board of Directors has recommended a dividend of 110% 11 per share) for the year on the paid-up share capital of Rs.3615.400 Millions which will absorb a sum of Rs.4548.600 Millions out of the profit after tax inclusive of Rs.571.600 Millions for Corporate Dividend Tax on distributed profits. BPCL's net worth as on 31st March, 2012 stands at Rs.149138.600 Millions, as compared to Rs.140576.200 Millions 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.3615.400 Millions. Accordingly the Paid-up Equity Capital of the Company presently stands increased to Rs.7230.800 Millions from the pre-bonus level of Rs.3615.400 Millions. 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.31349.900 Millions as against Rs.27593.100 Millions in 2010-11. BPCL's contribution to the exchequer by way of taxes and duties during 2011-12 amounted to Rs.359943.000 Millions, as against Rs.360100.800 Millions in the previous financial year.

 

Borrowings from banks increased from Rs.160885.700 Millions as at 31st March, 2011 to Rs.207499.400 Millions at the close of the current financial year. Loans from Oil Industry Development Board decreased to Rs.7437.500 Millions as at 31st March, 2012 from a level of Rs.8717.500 Millions as at the end of the previous year. Debentures worth Rs.10000.000 Millions 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.1.900 Millions, which pertains to 16 depositors.

 

The total Capital Expenditure during the year 2011-12 amounted to Rs.27618.100 Millions as compared to Rs.25322.000 Millions during the year 2010-11.

 

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.15030.000 Millions as compared to Rs.18850.000 Millions 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.10990.000 Millions as compared to Rs.14460.000 Millions in 2010-11. The lower GRM for the year in 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.

 

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.

 

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.17772.300 Millions. BPCL has also given a loan of Rs.13541.000 Millions and subscribed to Rs.786.100 Millions warrants, representing the right to subscribe to Rs.786.100 Millions equity shares of Rs.10 each at a later date at a cost of Rs.9356.800 Millions. 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.75515.600 Millions in the financial year ended as on 31st March, 2012. During the financial year 2010-11, there was other income of Rs.122.400 Millions. The net loss for the year stood at Rs.11159.800 Millions as compared to Rs.661.000 Millions 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.6391.100 Millions and the cumulative expenditure as on 30th June, 2012 stood at Rs.6147.800 Millions.

 

Bina Kota Product Pipeline

 

The project, with an approved cost of Rs.4058.200 Millions 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.3938.800 Millions. 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.1528.900 Millions. 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.71.900 Millions.

 

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 BORL's refinery at Bina. The estimated as-built project cost is Rs.2762.700 Millions.

 

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 and 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.142250.000 Millions. 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.18270.000 Millions. The project has achieved an overall progress of 73.96% with a cumulative expenditure of Rs.6115.500 Millions 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.14190.000 Millions. 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 BPCL's 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.3044.000 Millions while the cumulative expenditure up to 30th June, 2012 was Rs.2734.100 Millions.

 

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. BPCL's 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.2068.100 Millions is being undertaken along with HPCL and the cost will be shared equally by the two companies. The cost of MSVs amounting to Rs.400.000 Millions 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.1557.600 Millions 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.

 

 

SUBSIDIARY COMPANIES

 

Numaligarh Refinery Limited (NRL)

 

NRL was incorporated in 1993 with an authorized capital of Rs.10000.000 Millions. 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.140042.500 Millions for the financial year ending 31st March, 2012 as compared to Rs.89551.400 Millions in the previous year. The Company's profit after tax for the year stood at Rs.1837.000 Millions as against a profit of Rs.2792.600 Millions 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.26992.600 Millions 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.30000.000 Millions and the subscribed and paid up share capital of BPRL is Rs.11000.000 Millions. 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.18.100 Millions for the financial year ending 31st March, 2012 and had a loss of Rs.889.400 Millions as compared to income of Rs.6.700 Millions and loss of Rs.189.800 Millions for the financial year ending 31st March, 2011.

 

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.12000.000 Millions. 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.987.500 Millions. As at 31st March, 2012, PLL had a net worth of Rs.35197.800 Millions with a book value of Rs.46.93 per share.

 

PLL recorded a sales turnover of Rs.226960.000 Millions in the financial year ended as on 31st March, 2012 as compared to Rs.131970.000 Millions recorded in 2010-11. The net profit for the year stood at Rs.10575.400 Millions as compared to Rs.6196.200 Millions 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.2200.000 Millions for implementing the project for supply of Compressed Natural Gas (CNG) to the household and automobile sectors in Delhi. BPCL invested Rs.315.000 Millions 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.27901.000 Millions and a profit after tax of Rs.3064.300 Millions for the financial year ending as on 31st March, 2012 as compared to a turnover of Rs.19515.000 Millions and a profit after tax of Rs.2597.700 Millions 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.12289.400 Millions 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.1000.000 Millions 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.7043.300 Millions and profit after tax of Rs.110.300 Millions for the financial year ending 31st March, 2012 against a turnover of Rs.4555.800 Millions and profit after tax of Rs.275.600 Millions 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.600.000 Millions. The joint venture partners have each invested Rs.150.000 Millions 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 and Financial Services Limited (ILF and S). CUGL has set up 11 CNG stations. The Company has commenced its PNG operations.

 

CUGL has achieved a turnover of Rs.1247.100 Millions and profit of Rs.211.300 Millions for the financial year ending 31st March, 2012 as compared to a turnover of Rs.733.700 Millions and a profit of Rs.123.000 Millions 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.1000.000 Millions. BPCL and GAIL have invested Rs.225.000 Millions each in MNGL's equity capital. The Maharashtra Government will hold a 5% stake in the Company. The balance equity shares have been subscribed by IDFC, IL and FS and Axis Bank as shareholders. The Company has set up 14 CNG stations so far.

 

MNGL has achieved a turnover of Rs.854.800 Millions for the financial year ending 31st March, 2012 and profit of Rs.121.000 Millions for the year as against a turnover of Rs.354.800 Millions and profit of Rs.0.300 Million 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.100.000 Millions for providing into plane fuelling services at the new Bengaluru International Airport. The authorised share capital of BSSPL was subsequently enhanced to Rs.200.000 Millions.

 

The two promoters have each subscribed to 50% of the equity share capital of BSSPL and BPCL's present investment stands at Rs.100.000 Millions. 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.103.800 Millions for the financial year ending 31st March, 2012 and profit of Rs.15.000 Millions as against a turnover of Rs.87.200 Millions and a profit of Rs.12.400 Millions 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.300.000 Millions. 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.22000.000 Millions 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.0.600 Million for the financial year ending 31st March, 2012 and incurred a loss of Rs.18.400 Millions as against a miscellaneous income of Rs.0.300 Million and a loss of Rs.17.400 Millions 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.200.000 Millions. 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.160.000 Millions 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.2.300 Millions and a net loss of Rs.2.500 Millions for the financial year ending 31st March, 2012 as against income of Rs.0.23 crores and a net loss of Rs.14.600 Millions 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, in its meeting held in December 2006 accepted PILLs 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.490.000 Millions for a 49% stake in the equity capital of PCCKL, a Joint Venture Company promoted with PIL with an authorised share capital of Rs.1350.000 Millions. The Company owns 292 Km long multi-product Kochi-Karur pipeline from BPCLLs 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.695.000 Millions and net profit of Rs.203.400 Millions for the financial year ending 31st March, 2012 as compared to a turnover of Rs.548.700 Millions and net profit of Rs.89.100 Millions 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. BPCL's onsite assets at the Delhi Airport were transferred to the Joint Venture. DAFFPL has registered a turnover of Rs.1227.500 Millions and net profit of Rs.323.400 Millions for the financial year ending 31st March, 2012 as against a turnover of Rs.960.500 Millions and net profit of Rs.346.700 Millions in the previous year.

 

ECONOMIC DEVELOPMENTS

 

The global economy continued to face a number of challenges during the year 2011-12. Countries had to deal with the problems of high commodity prices and the lukewarm pace of economic growth. Even in countries like China and India, there has been a moderation in the growth rate. The crisis in the Euro zone continued to simmer with the situation in Greece threatening to get out of hand. Although countries like Germany and France have worked towards helping Greece avert a major crisis, the situation remained grim. Recently, Spain the fourth largest economy in the European Union, has slipped into recession. Major economies like Italy are also passing through an extremely stressful period. Credit ratings of large banks were downgraded and there are growing fears of a serious economic meltdown. As strict austerity measures are being implemented, countries are facing a backlash from citizens who are badly affected by them. The consequent instability on the political front is hampering efforts aimed at dealing with the difficult situation. Under the circumstances, the world is seeing a period of tepid economic growth, despite central banks keeping interest rates at very low levels. In addition, there are political concerns, like the sanctions on Iran, which have the potential of developing into a full blown crisis.

 

The domestic market has seen the Reserve Bank of India maintain an extremely hawkish stand on interest rates, as it sought to rein in the rate of inflation. It was only in the annual credit policy statement for 2012-13 announced in April 2012 that the Reserve Bank finally reduced the key interest rates. This was quite unlike the situation in many other economies, where the Central Bank maintained an easy money policy. However in the first quarter review of Monetary Policy 2012-13 announced in July 2012, the Reserve Bank refrained from announcing any further cut in the key interest rates although the statutory liquidity ratio of scheduled commercial banks was reduced by 100 basis points. The high domestic interest rates have had an impact on corporate performance and encouraged companies to look at borrowings in foreign currencies, as the effective interest costs looked very attractive as compared to the domestic rates. However, the recent past has seen a sharp depreciation in the value of the Indian rupee with reference to the US Dollar. The rupee had even breached the Rs.57 mark with reference to the dollar. There are no visible signs of the trend getting reversed significantly in the coming days. This is throwing up major challenges, considering that foreign inflows have reduced and demand for dollars is increasing. Although there has been a decline in the international prices of commodities like oil on the back of the global economic crisis, the benefit is getting negated with the fall in the value of the rupee. Consequently, inflation remains high and a cause of worry for policy makers. The domestic economy therefore, faces major challenges in the days ahead.

 

The challenging economic environment has had an adverse impact on the growth rate of the Gross Domestic Product (GDP). As per the Revised Estimates of the National Income for the year 2011-2012 released by the Government of India, the GDP is estimated to have grown at a rate of 6.5% over the previous year. This represents a significant reduction as compared to the growth rate of 8.4% achieved in 2010-2011. The decline in the growth was pronounced in the last quarter of the year when it stood at 5.3% over the corresponding period of last year. The high interest rate scenario, coupled with the fact that commodity prices remained firm, have contributed to this decline in the growth rate. Although the growth rate in the last quarter of 2011-12 has been the lowest in the last nine years, India continues to remain one of the few major economies which is growing at a reasonable rate. However, the year 2012-13 is expected to remain challenging on account of the ongoing crisis in the European Union and the depreciation in the rupee.

 

Almost all the sectors of the economy have seen a fall in the rate of growth as compared to the previous year. The agriculture sector, which remains the country's mainstay, is estimated to have grown at a much lower rate of 2.8% as against 7% in the previous year. The manufacturing sector has grown by only 2.5%, which represents a sharp fall as compared to the rate of 7.6% achieved in 2010-11. The high interest rates remain a cause for concern for this sector and the declining rupee will also lead to cost pressures. The services sector was relatively better off in 2011-12. However, the global economic scenario does not inspire much confidence for this sector for the coming year. There are thus, major challenges on the horizon for the coming financial year 2012-13. The stock markets have been lacklustre, mainly on account of a lack of any positive triggers. There are no major public issues of shares by companies or divestment proposals in the near future. The worries around the foreign currency borrowings of Indian companies, which are falling due for repayment in the days ahead, are adding to the sense of pessimism on account of the rupee movement against the dollar. The Government of India is attempting to address the concerns of investors with regard to some of the proposals of the last Union Budget. Policy makers are trying their best to mitigate the situation and provide support to help the economy to navigate the extremely difficult situation and some measures relating to the external commercial borrowings were announced recently.

 

The crude oil prices have remained above the USD 100 per barrel throughout the year 2011-12. Consequently, the average price of the Indian basket of crude oil was around USD 112 per barrel for the year. The developments in the global geo-political scene have ensured that prices remained firm in 2011-12. The sanctions imposed by the western world on Iran have curtailed the supplies from one of the world's key oil producers. The closure of the nuclear plants in Japan after the tsunami has led to a sharp increase in demand for oil and gas. Major producers like Saudi Arabia have increased their production to their peak levels in an effort to meet the global demand. The month of June 2012 has seen the softening of the international crude oil prices, mainly on account of fears of a global industrial slowdown. However, for a country like India, the gains arising from a moderation in international prices has been offset to a large extent by the decline in the exchange rate of the Indian rupee. In the days ahead, a lot will depend on major developments across the world, like how the European crisis plays out, as any adverse development has the potential of disrupting the global economy in a major way. The measures adopted by the Reserve Bank of India will be watched closely by the Indian corporate sector. The Government of India would also be expected to play a proactive role in ensuring that the economy continues to grow at a reasonable rate. The financial year 2012-13 is therefore, likely to remain very tough and challenging.

 

TRENDS IN THE OIL AND GAS SECTOR

 

The crude oil prices in the international market have remained firm during the year 2011-12. The average price during the year of the benchmark Brent crude oil was USD 114.58 per barrel as compared to USD 86.73 in 2010-11. The high prices can be attributed to factors like the imposition of economic sanctions on Iran by the United States of America, the ongoing crisis in Syria and the impact of the devastating earthquake and tsunami which had struck Japan in March 2011. There has been a downtrend in the crude oil prices in June 2012. The price had reached a level of USD 90 per barrel, bringing relief to oil importing countries like India. However, prices have started firming up in July 2012 with the average price since then remaining above the USD 100 per barrel mark.

 

According to the Oil Market Report dated 13th June, 2012 published by the International Energy Agency (IEA), the average global demand for oil in the year 2011 stood at 89.1 Million Barrels per day (MBPD) as compared to 88.4 MBPD in 2010. The high prices, along with the slow pace of the global economic recovery, have resulted in the muted growth in demand. On the supply side, the year 2011 saw an increase in availability of crude oil from OPEC countries. The full implementation of the sanctions announced by the United States of America on the oil and banking sectors of Iran is likely to impact the availability of oil from that country.

 

The Asia Pacific region continued to account for most of the growth in the demand for oil in 2011, even as demand remained flat in the developed countries in North America and Europe. The trend is expected to continue in the year 2012 also, when the average global demand for oil is estimated to be around 89.9 MBPD, which will be an increase of 0.8 MBPD over the figure in 2011. The growth will be influenced by the movement in the crude oil prices and the pace of economic growth. The economies of India and China are amongst the few which are growing at a reasonable rate. However, there are expectations of a slowdown in the growth rate in 2012 which could have an adverse effect on the demand for oil. The geo-political tensions in different parts of the world will also have a major bearing and any supply disruption can cause prices to go up sharply. In the Indian context, any decisions taken by the Government of India with regard to the administered prices of sensitive products like High Speed Diesel (HSD), and domestic supply of Liquefied Petroleum Gas (LPG) and Kerosene can have an impact on the demand for these products.

 

The financial year 2010-11 saw the average Brent Dubai differential standing at USD 2.60 per barrel, which was a change from the previous few years when the differential had narrowed. The differential has widened during the year 2011-12 when the average differential stood at USD 4.44 per barrel. During the first quarter of the current financial year, the gap has once again narrowed to around USD 2.10 per barrel which could have an impact on the refining gross margins.

 

The year 2011-12 saw crude oil supplies improve from countries like Iraq and Libya. With the pace of the global economic recovery uncertain and the ongoing crisis in European countries like Greece and Spain, the demand side is not expected to cause a rise in the crude oil prices. However, the political turmoil in countries like Syria and the escalation of tensions in countries like Iran have the potential of affecting the supplies of crude oil which can impact prices. Also, any decline in the growth rates of India and China can affect demand. In line with the higher crude oil prices in 2011-12, the average product prices have also remained at higher levels when compared to the previous year. The firm trend in the prices has continued in the first quarter of the financial year 2012-13. However, the prices of finished products have declined in June 2012. The fall in the product prices offers some respite to the public sector oil marketing companies by bringing down the extent of the under- recoveries on the sale of products like HSD, LPG (Domestic) and Kerosene (Domestic). The relief could have been much more substantial but for the decline in the value of the Rupee with reference to the Dollar. However, India's demand for petroleum products is expected to remain strong, given that the economy will keep growing notwithstanding all the challenges.

 

INDIAN PETROLEUM SECTOR

 

Based on the provisional data released by the PPAC, the consumption of petroleum products in the country in 2011-12 stood at 147.99 MMT as compared to 141.04 MMT in the previous year, representing a growth of 4.9%. If the sales volume of only the public sector oil companies is considered, the growth rate stands at 6.2% over the sales volume of the earlier year.

 

Significant growth in the sales volume was seen in the case of transportation fuels like Motor Spirit (MS) and HSD. While sales of MS grew by 5.6%, the sales of HSD went up sharply by 7.8%, as against a growth of 6.8% in the previous year. Amongst other products, consumption of LPG went up by 7.2% over the previous year and that of Aviation Turbine Fuel (ATF) increased by 9%. In the case of both LPG and ATF, the growth rate is slightly lower than the rate in the previous year. The impact of the decision of the Government to permit airlines to directly import ATF for meeting their requirements remains to be seen. In the case of products used in the Industrial sector, the growth has remained flat or has declined. Sale of Naphtha has increased by 4%, thus reversing the trend of the previous year. The increase can be attributed to a decline in the availability of domestic gas and the high prices of LNG. Bitumen sales have grown by around 2% in the year. On the other hand, there has been a decline of around 19% in the sales volume of fuel oil. The domestic demand for petroleum products in the coming days will be impacted by the movement of international prices and the value of the rupee. The Government may also have to review the prices of sensitive petroleum products as the under-recoveries are putting a severe strain on the financial position of the oil companies.

 

During the year, the average cost of the Indian basket of crude oil went up to USD 112 per barrel as compared to USD 85 per barrel in the earlier year. This was the highest in any financial year. In June 2012, although the international prices have come down, the sharp decline in the value of the Indian rupee with reference to the Dollar has prevented the economy from getting the full benefit of the fall in crude oil prices.

 

The total quantum of crude oil imported into the country during the year 2011-12 stood at 171.73 MMT, which was an increase over the level of 163.59 MMT imported in the previous year. With international oil prices being firm throughout the year, the imports of crude oil have increased significantly in value terms. The outgo, which stood at USD 100 billion in 2010-11, went up to USD 139 billion in 2011-12. With India dependent on imports for meeting a major portion of its crude oil requirements, the value of imports in rupee terms will increase sharply with the depreciation in the rupee unless there is a sharp fall in international prices.

 

The quantum of crude oil processed by the domestic refining sector in 2011-12 stood at 203.76 MMT, as compared to 196.5 MMT in the previous year. This is much higher than the domestic demand for petroleum products. The commissioning of the new refinery in Bina during the year has added to the country's refining capacity. With the 9 Million Metric Tonnes Per Annum (MMTPA) grass roots refinery at Bhatinda coming on-stream in 2012-13, the refining capacity in the country will increase further. Consequently, India will continue to remain a major exporter of petroleum products. During the year 2011-12, the volume of petroleum products exported was around the same level as the previous year. The volume of exports of finished products in 2011-12 stood at 60.84 MMT as against 59.08 MMT in 2010-11. Although the growth in the export volume remained flat, the firm international prices led to a significant increase in the export realisation which went up from USD 43.34 billion in the previous year to USD 59.32 billion in 2011-12. Although the country continues to import products like LPG, MS and HSD, there was a reduction in the quantum of petroleum products imported into the country. As against a volume of 16.82 MMT imported in 2010-11, the imports came down to 15 MMT in 2011-12. However, the outgo in money terms remained unchanged at USD 11.3 billion in both the years.

 

The international prices of crude oil and petroleum products remain volatile. Also, the retail selling prices of sensitive products like HSD, LPG (Domestic) and Kerosene (Domestic) do not reflect the prevailing prices in the international markets. Consequently, the public sector oil marketing companies have had to operate with the burden of high levels of under-recoveries on the sale of these products. The fall in international prices in the month of June, 2012 has given some relief by way of reducing the quantum of under-recoveries. However, till such time the domestic prices are synchronised with the international prices, oil marketing companies will continue to suffer from under-recoveries. The Government of India is exploring various approaches for dealing with the issue in a manner which will ensure the elimination of under-recoveries while making available the benefits of subsidies to the needy sections of the population.

 

 

While the retail pricing of MS has been decontrolled, the selling price of HSD, LPG (Domestic) and Kerosene (Domestic) continues to be decided by the Government. Given the substantial increase in the international prices and the fall in the value of the rupee, the price of MS was increased by Rs.7.54 per litre with effect from 24th May, 2012. Subsequently, prices of MS have been reduced by Rs.2 per litre on 3rd June, 2012 and by Rs.2.46 per litre from 29th June, 2012 before being increased by Rs.0.70 per litre from 24th July, 2012. During the year 2011-12, the retail selling price of MS was increased on 15th May, 2011, 1st July, 2011, 16th September, 2011 and 4th November, 2011. The selling price was also reduced on 16th November, 2011 and 1st December, 2011. In the case of HSD, LPG (Domestic) and Kerosene (Domestic), the retail selling prices were increased with effect from 25th June, 2011. In addition, prices were revised on 1st July, 2011 in the case of HSD and LPG (Domestic) on account of changes in Dealers' Commission. Apart from this, there was no revision in the selling prices during the year 2011-12 in respect of these products.

 

The under-recoveries suffered by the downstream marketing companies continued to be compensated, partially by the upstream oil companies by way of discount on the crude oil purchased by the refining companies, and the balance was made good by the Government of India by way of cash compensation. The oil companies have to deal with severe liquidity constraints on account of the time lag in the receipt of the compensation. Consequently, there has been a substantial increase in the level of borrowings and the resultant higher interest cost has been absorbed by the oil companies. Also, the oil marketing companies had to absorb some losses on the sale of MS, as the same are not covered under the compensation mechanism. All these factors are posing challenges to these companies in terms of generating adequate resources for undertaking their capital expenditure plans.

 

The Government of India has been looking at various alternatives to address the growing subsidy burden. There are also concerns on the impact of any increase in selling prices of products like HSD on the rate of inflation, which even otherwise has remained too high for the comfort of policy makers. Efforts are also on to see whether technology can provide an effective mechanism for directing the benefit of subsidy only to the sections of the population who need them. Till such time a lasting solution is found, the oil marketing companies will continue to face the issue of under-recoveries. At the same time, once this critical issue is addressed, there is bound to be increased competition from the entry of private players, which will ultimately benefit the consumer. The coming days are therefore, expected to be extremely challenging, even as there are bound to be immense opportunities for growth.

 

PERFORMANCE

 

REFINERIES

 

BPCLs two refineries at Mumbai and Kochi achieved a total throughput of 22.91 MMT, representing an overall capacity utilisation of 106.5%. With the Kochi Refinery operating with the expanded capacity of 9.5 MMTPA during the year, the total throughput was higher than the level of 21.78 MMT achieved in 2010-11. Both the refineries achieved their highest level of throughput in a single financial year with Mumbai Refinery recording a throughput of 13.35 MMT and Kochi Refinery's throughput standing at 9.56 MMT. The capacity utilisation at the Mumbai and Kochi Refineries stood at 111.25% and 100.63% respectively. During the year, Mumbai Refinery achieved its highest ever production of ATF, Propylene (C3), MS, HSD, Methyl Tertiary Butyl Ether (MTBE), Bitumen, Furnace Oil and Lube Base Oils in a single year. The cumulative production of Lube Base Oil at Mumbai Refinery crossed the 1 MMT mark since the commissioning of the Lube Oil Base Stock Unit. Kochi Refinery achieved its highest ever production of LPG, ATF, Propylene, Euro III MS, Euro III HSD and Bitumen in a single year.

 

The year saw a reduction in the Gross Refining Margin (GRM) of the Mumbai and Kochi refineries. The GRM for Mumbai Refinery in 2011-12 stood at USD 3.12 per barrel as compared to USD 4.23 per barrel realized in 2010-11. This translates into an overall gross margin of Rs.15030.000 Millions for the year as against the gross margin of Rs.18850.000 Millions achieved in 2010-11. The reasons for lower GRM are due to crude cost variation, increase in octroi cost, abolition of custom duty on imported crude and reduction in duty on finished products, higher export loss and impact of higher prices of Re-gasified LNG (RLNG). The GRM of Kochi Refinery in 2011-12 stood at USD 3.20 per barrel, which is lower than the level of USD 4.83 per barrel achieved in 2010-11. In rupee terms, the GRM for the year amounts to Rs.10990.000 Millions as against Rs.14460.000 Millions in 2010-11. The lower GRM for the year 2011-2012 can be attributed to higher export loss and crude and product rate variations.

 

A number of performance improvement measures were undertaken during the year. At Mumbai Refinery, consumption of RLNG and recovery of hydrogen from CRU off gas, implementation of Advanced Process Control in some of the key units of the refinery complex, maximization of Bitumen production, increased Propylene production by suitable plant modification and maximum absorption of Kerosene in the Diesel pool were some of the initiatives aimed at improving the GRM. Kochi Refinery has implemented various schemes for achieving margin improvement. These include commissioning of a crude oil blender for maintaining consistent crude quality, providing step-less controller in make-up gas compressor in DHDS, heat recovery from flashed LP steam from condensate in NHT/CCR, advanced process control in Hydrogen Generation Unit and installation on VFDs in 16 motors for reducing power consumption.

 

Mumbai Refinery continues to be in the forefront in implementing innovative ideas for bringing about process improvements. A key modification in the Hydrogen Unit steam network resulted in improvement in pre-reformer temperature, reduction in reformer skin temperature and fuel consumption. This has also led to process heat being augmented by reducing steam superheat. With an eye on margin improvement, Mumbai Refinery has embarked on a "Refinery Performance Improvement Program" along with M/s. Shell Global Solutions. This programme is being carried out under the guidance of the Centre for High Technology under the auspices of Ministry of Petroleum and Natural Gas. Various schemes related to energy saving and margin improvement identified during this study are at different stages of implementation. A similar programme had already been undertaken at Kochi Refinery with M/s. Shell Global Solutions during the period 2007 to 2010.

 

Mumbai Refinery has also successfully implemented a state-of-the-art "Business Process Monitoring and Intelligence" system - a portal that facilitates monitoring of "Key Performance Indicators" of refinery performance. Mumbai Refinery continued to use quality enhancement tools like Six Sigma and Quality Circles spanning across all major functional areas. The quality circle won the highest category "Par Excellence" Award in the National Convention on Quality Concepts - 2011 (NCQC-2011) held in Hyderabad for the case study on "Optimization of Waste Heat Recovery in Heat Recovery Steam Generators". The team also won the Silver Trophy in the Chapter Convention on Quality Concepts -2011 (CCQC-2011) which was held in Mumbai. Quality Circles have been a key improvement initiative in Kochi Refinery since 2004. The Quality Circle in Maintenance won the Excellent category Award at the National Convention of Quality Circle Forum of India held in December 2011. They were also the 2nd Runner up in the CII Kerala QC Case Study competition. A member from the Quality Circle in Power and Utilities won the Vishwakarma Rashtriya Puraskar in November 2011.

 

Mumbai Refinery won the "Performance Excellence Award" of the Ramakrishna Bajaj National Awards (RBNQA 2011) under the large Manufacturing Category for the fifth consecutive time. RBNQA is one of the most prestigious quality and business excellence awards modelled on the world famous Malcolm Baldrige National Quality Award in USA. The refinery laboratories continued to perform well in the international laboratory proficiency testing scheme run by Shell Global with more than 95% rating. Kochi Refinery's Quality Control Laboratory continued its participation in the Shell Main Products Correlation Scheme of M/s. Shell Global Solutions, Netherlands and obtained a score of 100% seven times for satisfactory performance. During the year, Kochi Refinery's R and D Centre commissioned several analytical and testing types of equipment. The refinery also conducted several trials in the FCC pilot plant for the evaluation of LPG enhancement additives, feasibility of subjecting vegetable oils to cracking directly in FCC etc.

 

Both the refineries were certified under the Integrated Management System (IMS) for 2011-12. The IMS is aimed at having an unified approach in the processes, interfaces, structures and documentation systems by combining the individual management systems under ISO 9001, ISO 14001 and OHSAS 18001. High safety standards were maintained at Mumbai Refinery leading to good all round safety performance. During the year, Mumbai Refinery achieved 3.27 million hours of operations without Lost Time Accident (LTA). Kochi Refinery achieved 26.15 million man-hours of operations without any Lost Time Accident as on 31st March, 2012. Three officers in Kochi received 'Presidents' Gallantry Award for Fire Service' for their meritorious service. Kochi Refinery also received several awards during the year for excellent performance on the safety front.

 

On the environmental conservation front, enhanced usage of RLNG for replacing liquid fuels has contributed to the reduction of CO2 and SO2 emissions from Mumbai Refinery. Rainwater harvesting schemes were further strengthened to utilize more than 38,000 Kls of water. In addition, a number of significant environmental initiatives were also undertaken as part of the Environmental Management System. A "Water conservation" drive assumed high priority and Mumbai Refinery has used more than 4,50,000 Kls of treated water in various cooling towers, thereby reducing raw water consumption. Conservation of energy is another key area where Mumbai Refinery has been adopting innovative process related initiatives and hardware changes. As a part of energy saving and loss control measures, the refinery employed "Chemical cleaning of heat exchangers" leading to reduction in the number of days of outage of exchangers, optimization of internal/circulating reflux rates in column operations, incorporation of Advanced Process Control Logic in furnace operations etc.

 

During the year 2011-12, Kochi Refinery received the State Pollution Control Award - 2010 Excellence Award for outstanding achievement in pollution control from the Kerala State Pollution Control Board. Kochi Refinery commissioned a 15 KW solar power plant that covers an area of 140 sq.m of the refinery administration building. This power is directly wheeled to the refinery grid. About 13 energy conservation projects were implemented at Kochi Refinery during the year with savings in energy consumption and reduction in CO2 emissions.

 

Mumbai Refinery organized several need-based learning and development initiatives including functional programs, strategy workshops, people management skills and on the job training. A total of about 15,000 man-days of training were organized providing opportunity to all sections of employees to upgrade their skills. Employees were also exposed to various programs organized by premier institutions in India, in order to develop their competencies as per global standards and provide them with an opportunity of collaborative learning with executives of other organizations.

 

During 2011-12, 1,434 employees were given training at Kochi Refinery. A series of competency enhancement workshops in compassionate communication, work life balance, personal effectiveness and effective communication were conducted for the management staff.

 

Social welfare and development has been at the core of BPCL's corporate social responsibility philosophy. The Company's efforts are aimed at bringing about qualitative changes in the lives of the surrounding community through well planned and coordinated social welfare initiatives. Such programs included vocational guidance courses and medical services at Mahul and Karjat villages near Mumbai. In its continuous endeavour to ensure quality education, programs such as award of scholarships and utilities for poor students, extending capability exploration and enhancement programs for talented poor children were undertaken. As a part of the efforts in the field of Education, Kochi Refinery is supporting the Capability Exploration and Enabling Program (CEEP) initiated by the NGO - Nanma Movement. This programme provides training to hundreds of underprivileged children in Government schools for unleashing their unique potential. BPCL is also providing support for 75 One Teacher schools for poor tribal children under the Ekalvidyalaya Program initiated by NGO Friends of Tribals Society.

 

RETAIL

 

The Retail business continued to operate in an extremely challenging business environment. While the pricing of MS was decontrolled with effect from 25th June, 2010, the business continued to suffer significant under-recoveries on the sale of HSD. The public sector oil marketing companies are facing liquidity problems mainly on account of these under-recoveries. In addition, BPCL has also absorbed some losses on sale of MS during 2011-12. It is only during the beginning of the year 2012-13 that international prices of MS and HSD have shown signs of coming down, although the rupee depreciation has limited the benefit on account of this decline. The prices have once again firmed up in the international market. There are indications that the Government is considering various proposals to address the issue of under-recovery on sale of HSD. Any decision to reduce the extent of the under-recoveries will benefit the public sector oil marketing companies. There are expectations that in the long run, selling prices of HSD will be market driven. This will lead to greater competition in the automotive fuels market by encouraging the private refiners to re-enter the market. Under the circumstances, BPCL remains focussed on ensuring that it remains the customer's preferred fuel supplier and the overall strategy has been developed keeping this objective in mind. This is sought to be achieved by providing the best experience to the customer every time he visits the outlet. The effort is to try and understand the stated as well as the unarticulated needs of the customer.

 

During the year 2011-12, BPCLs Retail business recorded a growth of 9.88% over the volumes achieved in 2010-11. The sales volumes of MS grew by 6.1% while that of HSD grew by 13.1%. During the year 2011-12, BPCLs MS sales stood at 4.13 MMT while the HSD sales were of the order of 14.81 MMT. BPCL increased its market share in MS and HSD by 0.10% and 0.90% respectively. In the case of HSD, BPCL's growth in sales volume was higher than the industry average. The highway retailing strategy encompassing One Stop Truck Shop (OSTS)-GHAR for truckers, Highway Star initiative coupled with Smart Fleet program for fleet owners and highway truckers has been very successful over the years and continued to deliver high performance during the year 2011-12 with an impressive sale of 943 KL/month from OSTS outlets. However, higher prices impacted sales of branded MS, which stood at 180.15 TMT in 2011-12 with a conversion ratio of 4.6%. The branded HSD - "Hi Spee  Diesel" sales was of the order of 92.37 TMT. On the alternate fuels segment, BPCL recorded a growth of 14.1% with sales of CNG standing at 232.24 TMT and Auto LPG sales at 53.43 TMT.

 

This performance has been made possible by BPCL's excellent network of retail outlets managed by entrepreneurial Dealers. BPCL currently has 10,310 outlets across the country including 1,064 outlets commissioned during the year. BPCL aims to have a presence in all strategic locations throughout the country. BPCL also recognises the importance of the rural segment and hence, nearly 50% of the new outlets are being commissioned in rural markets. At the same time, attention continues to be paid to urban and highway outlets, which also make a significant contribution to the overall sales.

 

BPCL's average throughput per retail outlet at 191 Kls is nearly 22% higher than the industry average. BPCL also remains a pioneer in launching new initiatives aimed at meeting customer needs. The Pure for Sure (PFS) Programme, launched several years ago to ensure that the customer receives the correct quality and quantity, is being revitalized. Each PFS outlet, in addition to guaranteeing quality and quantity, will provide the base levels of service envisaged under the revised programme. By March 2013, it is expected that 4,500 Dealers will offer the revitalized PFS offerings. These outlets will be audited by an independent agency viz. TUV. The very best of the PFS Dealers are being upgraded to the PFS Platinum status. Each PFS Platinum outlet provides a distinctly superior ambience, hi-tech facilities and top class service. All these outlets have high end online automation for 100% of transactions, operate 24 hours and are covered by live CCTV streaming to BPCL's Retail headquarters. All bills are generated based on data from the fuel nozzle, eliminating the chance of the customer being charged excess. All staff at the outlets undergo a rigorous training programme spread over 8 weeks, which enables them to deliver courteous interactions at all times. Started at 60 outlets in 4 cities, there are now 250 such outlets spread across 10 cities. Another 250 outlets will be covered by this programme, including some outlets on the highways.

 

BPCL had taken the lead in providing the retail customers with the facility of convenience shopping at the retail outlets. The strategy for the In and Out stores is being further fine-tuned and it is expected that by March 2013 there will be a network of 204 stores. During the year 2011-12, the Allied Retail Business (ARB) achieved a turnover of Rs.3854.200 Millions. This makes it the largest non-fuel revenue generator in the oil industry. The income earned from ARB during the year stood at Rs.2090.000 Millions, which is the highest ever earned in a single financial year. 44 of the stores have sales in excess of Rs.1 million per month and in the case of 15 stores, the monthly sales are more than Rs.2.000 Millions. BPCLs loyalty programme continues to be popular, especially among the fleet community. As of March 2012, 16.07 % of the retail sales happened through the loyalty programme. The Retail business is in the midst of revamping the urban loyalty programme and the same is expected to be rolled out in the next few months.

 

BPCL remains committed to leveraging technology for ensuring better service to the customer. This is reflected in the coverage achieved in the area of automating retail outlets. As on date, 2,957 of BPCLs outlets are automated of which 1,657 outlets fall in the category of NANO (No Automation No Operations) outlets. In these outlets, 100% of the dispensing of fuel is done only through fully automated systems.

 

The success of BPCL's strategy revolves around having an excellent logistics system in place. The objective is to ensure world class, cost effective and safe operations while ensuring the timely placement of product at the least cost in all the markets. The new marketing terminal at the Bina Refinery and the Bina-Kota pipeline were commissioned during the year and are catering to the product needs of the central and northern region. This has enhanced BPCL's position in these key markets and will strengthen BPCL's retail operations significantly. This will also lead to reduced dependence on other oil companies and imports for meeting product requirements.

 

On the operations front, the level of product losses was maintained well within the targets during the year. Cross-country pipelines delivered significantly higher performance during the year with the movement of 6.33 MMT of product through the Mumbai-Manmad-Manglia-Bijwasan pipeline and 2.2 MMT through the Kochi-Coimbatore-Karur pipeline. Rail loading for BPCL was 10.2 MMT during the year 2011-12, which was significantly higher than the volume of 8.7 MMT in 2010-11. Most of the installations and depots were set up about two decades back. Consequent to a change in the scale of operations and the safety requirements, there is a need for shifting these to new locations. There will be challenges in terms of land availability, capital investment required and the ongoing liquidity constraints due to the under-recoveries on sale of sensitive products. BPCL is therefore, looking at innovative solutions including looking at new business models of putting up infrastructure projects.

 

As BPCL gears up to meet the growing demand for transportation fuels, focus is coming to be placed increasingly on developing a fully trained pool of human resources capable of handling new and emerging technologies in all areas of operations. Training of people at all levels remains a major thrust area. Territory Managers and Sales Officers were exposed to training conducted at the Indian School of Business, Hyderabad for enhancement of their channel management skills and a more positive engagement with the retail network. A vast majority of the Operations and Health, Safety, Security and Environment (HSSE) staff were given training on operations, gas safety inspection, tanker operations and live fire fighting.

 

INDUSTRIAL AND COMMERCIAL

 

The Industrial and Commercial (I and C) segment remains one of the most challenging in the downstream sector. With actual users and traders being able to directly import and private refiners being active, refining and marketing companies like BPCL have to operate in a very competitive and volatile environment. During the year, BPCL has focused on maximising value and not on volume growth alone. BPCL's I and C business achieved a total sales volume of 5.81 MMT in 2011-12, which represents an increase of almost 15.74% over the volumes achieved in the previous year. In the case of Bitumen, BPCL has recorded a growth of 30% in 2011-12, which is the highest growth amongst the public sector oil marketing companies. This has been possible by extending the marketing activities to hitherto unexplored areas including the north-east. BPCL has also entered the export markets of Bhutan and Nepal which have good potential for growth. The continuing strong focus on the bunkering business has helped in doubling the sale volumes of FO and HF - HSD, both in the domestic and export markets. The high cost of product combined with shutdown of plant operations in some of the large volume customers led to Naphtha and Benzene sales volumes decline by 34% and 40% respectively.

 

Sustained efforts were continued to achieve speedy collection of customer dues to ensure better cash flow management. Nearly 73% of the turnover of the business is being collected through channels like Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT), thereby ensuring prompt realisation of funds for BPCL.

 

The business remains one of the most challenging parts of the industry. BPCL remains committed to providing innovative and value added services to the customer in order to retain its ability to compete effectively in this tough environment.

 

GAS

 

BPCL handled 1,070.49 TMT of RLNG in 2011-12 as against 933 TMT handled in the previous year, representing an increase of 14.7%. Mumbai Refinery was supplied with 333.6 TMT of gas during the year for meeting the feed and fuel requirements of the refinery. The balance quantity of 736.89 TMT of gas was supplied to various customers in the fertilizer, power and other sectors. Subsequent to the successful commissioning of the pilot project at General Motors in Halol, Gujarat for supply of LNG by Tank Trucks, BPCL has tied up 5 new customers during the year for supply of LNG though this new mode of supply.

 

BPCL is a member of the consortium led by Gujarat State Petronet Limited (GSPL), which has been authorized by the PNGRB for laying, building and operating of three cross­country Gas pipelines viz. the 1,585 Km Mallavaram-Vijaypur-Bhilwara Pipeline, 1,670 Km Mehsana-Bhatinda Pipeline and 740 Km Bhatinda-Jammu-Srinagar Pipeline. This venture will involve significant investments to be made in the coming years. The completion of these pipelines will fulfill to some extent BPCL's aspirations for an entry into the gas transportation segment which is so crucial in the gas business. BPCL is also looking at building a stake in some of the LNG terminals being planned in several parts of the country. The commissioning of the LNG terminal at Kochi being set up by Petronet LNG Limited, a Joint Venture Company promoted by BPCL, will also enable BPCL to have access to increased gas volumes that can be marketed.

 

BPCL's plans for having a bigger presence in the Gas business continued to be pursued aggressively. The significant findings of gas in Mozambique in fields where BPCL's wholly owned subsidiary company has a participating interest also offers immense potential in the days ahead.

 

LUBRICANTS

 

The Lubricants segment of the market, which was the first to be decontrolled in 1993, has been operating in a very competitive market where a large number of private players and foreign companies have a presence. However, the public sector oil marketing companies continue to have a large share of the market. Apart from being one of the most competitive sectors, the demand for lubricants is significantly impacted by technological developments relating to the end users. The advancements in machine and engine technologies have led to significant improvements in the lubrication solutions. BPCL has kept pace with these developments and has made available upgraded products to meet the needs of the customers. The Indian market continues to grow at a rate higher than the world average on the back of the growth of the economy. Apart from quality of Lubricants, availability, service and value additions play a pivotal role in growth in this sector. BPCLs presence in the Lubricants market is strengthened by its access to its own source of Group II + Base Oils produced by Mumbai Refinery. The business has also invested significantly in nurturing the Company's flagship 'MAK' brand. BPCL's geographical presence across the country, R and D competency for continuous product upgradation and an excellent distributor network places it in an ideal position to take advantage of the opportunities and deal with the strong competition in the market.

 

BPCL's finished lubricants business grew by 3.80% in 2011-12 as compared to the average growth of 4.24% of the public sector oil companies. However, there was a reduction in the sales volume of Base Oil as compared to the previous year in the case of all the public sector oil companies. BPCL's Lubricants business recorded a sales volume of 263 TMT in 2011-12 as against 274.3 TMT in 2010-11.

 

Notwithstanding the strong competition, BPCL was able to maintain the sales volume of the previous year in the reseller segment. The direct channel posted a healthy growth of 14.89% over the previous year.

 

In the retail channel, focus continued on generating secondary sales at the retail outlets. Initiatives like MAK QUIK and One Day Wonder improved visibility of the brand and offered a value proposition to customers. The effort was also aimed at arresting the constant shift of market from the Company's retail outlets to the Bazaar segment by offering improved customer services. The high selling retail outlets across the country were identified, potential mapped and focused retailing to target customers was done, leading to substantial growth in Lubes sales volume from these outlets.

 

With the entry of more and more new players in this already hyper competitive market, there is a shift in the volumes to the Bazaar channel. BPCL continued its efforts to strengthen its position in this channel and identified product wise high potential markets for deeper penetration to make the product available at maximum points of sales and improve their visibility and availability. Today, MAK is available across the country at more than 23,000 retail counters, apart from small mechanic shops and authorized service stations.

 

In the Direct segment, BPCL has expanded the customer base with specific focus on key growth sectors in India. BPCL's portfolio covers a whole range of Industrial Lubricants offering products from normal applications like engine oils to Hydraulic, Cutting, Marine and very specialized products for applications in Defence and Railways. During the year, products were also launched for specific applications like MAK Stamping oil for automotive manufacturers, MAK Steel oils for steel plant applications, MAK Amocam Plus and superior Industrial Gear Oils.

 

Exports of Lubricants grew by 6.39% during the year. Export of Industrial grades to the Nepal market has commenced. Premium grades were launched in Sri Lanka. A new product, MAK LLPO, a base product for the cosmetic industry, was introduced in the Sri Lankan market.

 

Original Equipment Manufacturers (OEM) remain an important segment of the Lubricants business. With OEMs launching new models with improved engine technology, the lubricants offerings have to keep pace if the business has to grow. Lubricants for the post warranty period of vehicles and equipments are an important segment and BPCL has entered in a new alliance with a major tractor manufacturer in India for genuine engine and gear oil. This would help in improving the market share in this segment. To strengthen the existing tie-ups, 3 new grades were introduced in the existing product portfolio of OEMs. Oils developed for a specific global automobile manufacturer will help in increasing the market share through co-branding tie-up. A special product for auto OEM was also developed for their export vehicle requirement and would help in increasing the business with the OEM. High performance grease developed for the steel sector would help in increasing BPCL's presence in this sector.

 

The Lubricants business has immense potential in the Indian market. The projections for the automotive as well as the industrial sector remain strong and the lubes industry is expected to continue growing at a Compounded Annual Growth Rate of 4-5%. BPCL has aggressive plans, particularly in the retail and bazaar segments. Keeping pace with the development in the automotive and industrial segments, premium oils are also planned to be launched in the days ahead. However, success of a product would largely depend on how well it is positioned, branded, distributed and serviced. BPCL is gearing up to be able to meet the needs of all segments of customers and thereby, ensure that the business keeps growing at a healthy rate.

 

LPG

 

The LPG business remains one of the toughest businesses in the domestic downstream oil and gas sector on account of the under-recoveries on the sale of LPG to domestic households. Considering the fact that the prices of LPG (Bulk) in the international markets have been volatile and have remained at high levels during the year, the under-recoveries have had an adverse impact on the liquidity position of the public sector oil marketing companies. Notwithstanding the difficult conditions, BPCL was able to achieve excellent results during the year. BPCLs total LPG sales for the year 2011-12 stood at 3,870.4 TMT representing a growth of 8.9% over the volume of 3,555 TMT achieved in 2010-11. BPCLs market share also rose from 26% to 26.3% by the end of the financial year. In the packed commercial segment, where LPG is sold at a market determined price, BPCL registered a growth of 10.3% with sales volume reaching a level of 336 TMT in 2011-12. During the year, BPCL recorded the highest growth amongst the public sector oil marketing companies in the s ale of LPG (Packed) in both the domestic and non-domestic segments. In the 7th year since its launch, Bharat Metal Cutting Gas (BMCG) attained sales volume of 8,126 MT, registering growth of 10%. 303 MT of BMCG was sold overseas in 4 countries, namely, Sultanate of Oman, Kingdom of Saudi Arabia, United Arab Emirates and Sri Lanka. During the year, the 'Beyond LPG' initiative crossed the threshold of Rs.8000.000 Millions in turnover, ending the year with sales revenue of Rs.8920.000 Millions thereby, registering a growth of 12% over the previous year.

 

During the year 2011-12, BPCL commissioned 212 Distributors, including 180 outlets under the Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLV), taking the total number of BPCL distributors to 2,658. As on 1st April, 2012, the number of RGGLV distributorships has gone up to 313 and 3.58 lakhs households in 14 States are using LPG for cooking under the scheme. This has ensured that a growing section of the rural population is being benefited with the availability of LPG as a cooking fuel. BPCL enrolled 31.5 lakhs domestic customers, thereby expanding its customer base to 344.7 lakhs customers. During the year, an investment of Rs.1930.000 Millions was made for setting up additional tankage at 12 LPG bottling plants. Additionally, an investment of Rs.1100.000 Millions was made for installing electronic carousels in Plants. All these have strengthened BPCL's LPG marketing infrastructure.

 

In line with the demand, the total LPG filling in 2011-12 stood at 3,486 TMT at 49 bottling plants having installed capacity of 2,750 TMT, registering capacity utilization of 127%. Plans have been drawn up for augmenting existing facilities and setting up new infrastructure.

 

Making available new facilities to enhance customer service continued during the year. A major development in this area was the launch of the transparency portal on the e-Bharatgas site. All the details relating to the consumption of packed domestic LPG cylinders, including the number of refills supplied during the period, are made available for consumers to view. This is intended to bring about transparency in the supply and distribution of subsidized LPG. Refill booking through SMS facility coverage has been extended to 20 cities in the country. During the year, 4508 safety clinics were conducted across the country. Besides, various community level events and programmes were conducted as a customer engagement initiative. BPCL has provided a centralized feedback receiving mechanism by way of single national level telephone numbers, available 24 x 7, besides having a web page 'e-bharatgas'.

 

The LPG business continues to operate in a tough and challenging environment. At the same time, BPCL remains committed towards ensuring that the large domestic consumer population continue to receive uninterrupted supply of this important domestic fuel. BPCL is also working towards achieving significant growth in volumes and revenues from the non-domestic segment of the LPG market where there is no issue of under-recoveries.

 

AVIATION

 

The Aviation sector in India is passing through a turbulent period with airlines facing tough times on the financial front. Developments like the scaling down of operations of a major private airline and the prolonged Industrial Relations dispute in another major airline have had a major impact on the sector. The ATF business has also seen a significant change with airlines being allowed to directly import their own requirements instead of having to buy from the oil marketing companies. However, no airline has actually commenced such direct imports. On the performance front, BPCL closed the year 2011-12 with the highest ever sales volume of 1,189 TMT as compared to the volume of 1,129 TMT achieved in the previous year. BPCL currently has 22.1% of the market share in the country's ATF market.

 

During the year, BPCL was successful in enrolling four new airlines as its customers. BPCL was also able to roll over the contracts of some of the large volume foreign airlines. BPCLs network was further expanded in 2011-12 with the commencement of operations at airports at Mangalore, Bhopal, Patna and Trichy. Operations were also started at the Phalodi base of the Indian Air Force and the HAL Airport at Bangalore. As at the end of the year, BPCL has a presence in a network of 36 airports across the country. BPCL has also entered into an alliance with Air Total with a view to attaining access to the fuelling requirements of their contracted aircraft operators and airlines at Indian airports. The ATF pipeline from Mumbai Refinery to the Airport at Santa Cruz in Mumbai was also commissioned during the year. This will facilitate easier movement of the fuel from the refinery to the airport. The business is also looking at innovative solutions for optimising operating costs at airports while complying with all the regulations laid down by authorities like the Director General of Civil Aviation and Chief Controller of Explosives. At the same time, all operations were carried out without any incident and in compliance with the highest HSSE standards. BPCL is also looking at having a stake in some of the green field airport projects that are being planned. The Board has approved investment in one such project in Kannur in Kerala.

 

CONTINGENT LIABILITIES:

(Rs. In Millions)

Particulars

31.03.2012

31.03.2011

(a) In respect of taxation

1226.300

952.600

(b) Other Matters :

 

 

i) Surety bonds executed on behalf of other oil companies for excise/customs duties for which BPCL has signed as surety

1834.500

1834.500

ii) Claims against the Corporation not acknowledged as debts :

 

 

(a) Excise and customs matters

6453.400

12429.400

(b) Sales tax matters

28022.200

28800.300

(c) Land Acquisition cases for higher compensation

915.600

951.600

(d) Others *

2962.100

2272.000

These include Rs.10141.300 Millions (previous year Rs.7515.500 Millions) against which the Corporation has a recourse for recovery and Rs.437.300 Millions (previous year Rs.294.200 Millions) on capital account.

* In respect of lands acquired, land owners have claimed higher compensation before various Authorities / Courts, which are yet to be settled. The estimated contingent liability of Rs.951.600 Millions (previous year Rs.546.300 Millions) in such cases is included above.

 

 

iii) Claims on account of wages, bonus/ex-gratia payments in respect of pending court cases.

134.400

61.500

iv) Guarantees given on behalf of Subsidiaries/JV's

4618.300

44087.700

 

 

UNAUDITED FINANCIAL RESULTS (PROVISIONAL) FOR THE THREE MONTHS ENDED 31ST DECEMBER, 2012

(Rs. In Millions)

 

 

Particulars

Unaudited

Audited

Three Months Ended

Nine Months Ended

31-12-2012

30-09-2012

31-12-2012

A.

Physical Performance

 

 

 

1.

Crude Throughput (MMT)

5.55

5.94

17.40

2.

Market Sales (MMT)

8.47

7.77

24.74

3.

Sales Growth (%)

5.35

10.37

7.94

4.

Export Sales (MMT)

0.80

0.97

2.45

 

 

 

 

B.

Financial Performance

 

 

 

1.

Income from Operations

 

 

 

a)   Net Sales/Income from Operations (Net of excise duty)

623398.400

568595.200

1737220.900

b)  Other Operating Income

289.000

283.500

829.400

Total income from operations (net)

623687.400

568878.700

1738050.300

2.

Expenses

 

 

 

a)  Cost of materials consumed

240922.300

249007.400

743028.300

b)  Purchase of stock-in-trade

327845.200

267296.200

928904.700

     c)  Changes in inventories of finished goods, work-in-progress and stock-in-trade

3610.700

(16365.300)

(14908.800)

 

 

 

 

d)   Employee benefits expenses

5951.900

7344.800

19128.300

e)   Depreciation and amortisation expenses

4656.800

3982.800

13440.900

f)   Other expenses

22484.200

7715.400

66644.100

Total expenses

605471.100

518981.300

1756237.500

3.

Profit / (Loss)from Operations before other income, finance cost & Exceptional Items (1-2)

18216.300

49897.400

(18187.200)

4.

Other Income

4017.800

4567.800

11723.800

5.

Profit/ (Loss) from ordinary activities before finance cost & Exceptional Items (3+4)

22234.100

54465.200

(6463.400)

6.

Finance Cost

5758.400

4117.300

15080.500

7.

Profit / (Loss) from ordinary activities after finance cost but before Exceptional Items (5-6)

16475.700

50347.900

(21543.900)

8.

Exceptional Items

-

-

-

9.

Profit / (Loss) from ordinary activities before tax (7+8)

16475.700

50347.900

(21543.900)

10.

Tax expense

-

-

-

11.

Net Profit /(Loss) from Ordinary Activities after tax (9-10)

16475.700

50347.900

(21543.900)

12.

Extraordinary Items (net of tax expense)

-

-

-

13.

Net Profit / (Loss) for the period (11-12)

16475.700

50347.900

(21543.900)

14.

Paid-up equity share capital (face value of ? 10 per share)

7230.800

7230.800

7230.800

15.

Reserve excluding Revaluation Reserves as per balance sheet

-

-

-

16.

Earnings Per Share (EPS)

 

 

 

a)   Basic and diluted EPS before Extraordinary items - ?

22.79

69.63

(29.79)

b)   Basic and diluted EPS after Extraordinary items - ?

22.79

69.63

(29.79)

A.

PARTICULARS OF SHAREHOLDING

 

 

 

1.

Public shareholding

 

 

 

-    Number of shares *

32,58,84,128

32,58,84,128

32,58,84,128

-    Percentage of shareholding

45.07%

45.07%

45.07%

* includes shares held by BPCL trust

 

 

 

2.

Promoters and Promoter group Shareholding

 

 

 

a) Pledged/Encumbered

Nil

Nil

Nil

b) Non-encumbered

 

 

 

- Number of shares

39,72,00,120

39,72,00,120

39,72,00,120

 

- Percentage of shares (as a % of total shareholding of Promoter and Promoters group)

100%

100%

100%

 

- Percentage of shares (as a % of total share capital of the company)

54.93%

54.93%

54.93%

 

 

 

 

 

B.  INVESTOR COMPLAINTS (Nos.)

 

 

 

Pending at the beginning of the quarter

NIL

 

 

Received during the quarter

5

 

 

Disposed of during the quarter

5

 

 

Remaining unresolved at the end of the quarter

NIL

 

 

Notes :

 

  1. The market sales during the nine months ended 31st December 2012 was higher at 24.74 MMT when compared to 22.92 MMT achieved during the corresponding period of previous year. Increase is mainly in MS-Retail (7.42%), HSD-Retail (12.43%), RLNG (29.28%) and LPG (1.78%) partly offset by decrease in Furnace Oil (-10.82%).

 

  1. The Average Gross Refining Margin (GRM) during the nine months ended 31st December 2012 is USD 4.63 per barrel (April-December 2011 USD 1.92 per barrel).

 

  1. As advised by the Ministry of Petroleum and Natural Gas, the Corporation has accounted compensation towards sharing of Under-recoveries on sale of sensitive petroleum products as follows:

 

A) Rs.108821.300 Millions for the current nine months (April-December 2011: Rs.86235.500 Millions) discount on Crude Oil/Products purchased from ONGC/GAIL/NRL which has been adjusted against the purchase cost.

 

B) Rs.132266.500 Millions compensation advised by the Government of India by way of subsidy for the current nine months as against Rs.105181.600 Millions accounted during the period April-December 2011 as Income.

 

Consequent to non-revision in Retail Selling Prices corresponding to the international prices and applicable foreign exchange rates prevailing during the nine months, the company has absorbed net under-recovery of Rs.59166.700 Millions during April-December 2012 (April-December 2011: Rs.36462.300 Millions) on sale of sensitive petroleum products.

 

  1. Other expenditure for the nine months ended 31st December 2012 includes Rs.8416.000 Millions (April - December 2011 Rs.22478.700 Millions) towards losses on account of foreign exchange fluctuations.

 

  1. Depreciation includes Rs.4047.900 Millions for the current nine months as compared to Rs.5447.300 Millions during the period April-December 2011 on account of LPG cylinders depreciated at 100%.

 

  1. Corporation has issued bonus shares in the ratio 1:1 in July 2012. The Earnings Per Share (EPS) has been restated accordingly for all periods.

 

  1. Provision for tax expense has not been considered due to uncertainty in estimation of profit, pending finalisation of compensation mechanism for under recoveries on sale of sensitive petroleum products.

 

  1. Figures relating to corresponding periods of the previous year have been regrouped wherever necessary.

 

  1. The Corporation operates in a single segment viz. downstream petroleum sector. As such reporting is done on single segment basis.

 

  1. The Auditors have completed limited review of the financial results of the Corporation for the nine months ended 31st December 2012. Further, the Accounts were reviewed and approved by the Audit Committee on 13th February 2013 before submission to the Board.

 

FIXED ASSETS

 

  • Freehold Land
  • Leasehold Land
  • Building
  • Railway Sidings
  • Plant and Machinery
  • Tanks and Pipelines
  • Furniture and Fittings
  • Vehicles
  • Dispensing Pumps
  • LPG Cylinders and Allied Equipment
  • Sundries
  • Intangible Assets

 

PRESS RELEASE:

 

GOVT TO MOVE TO REVENUE SHARING ON OIL AND GAS

01.03.2013

 

Mumbai: Finance minister P. Chidambaram said the government will move towards a revenue-sharing model from a profit-sharing one in calculating the share of earnings that operators of oil and gas block have to pay it.

 

This is in line with the recommendations of the Rangarajan committee on formulating new production-sharing contracts between operators and the government, which stated that the government should move away from the existing cost-recovery model used to compute its share.

 

The finance minister, presenting the Union budget for 2013-14 on Thursday, sought to allay concerns the oil and gas sector has harboured for a while, including on natural gas pricing.

 

Without elaborating, Chidambaram said the government will decide on a natural gas pricing policy shortly and that bottlenecks preventing the development of oil and gas blocks awarded by the government will be removed.

 

He also said the government will shortly formulate a policy for shale gas exploration in India, which has been in the making for quite sometime.

 

PETROLEUM SUBSIDY REDUCTION MAY MAKE UPSTREAM OIL MAJORS ATTRACTIVE

01.03.2013

 

MUMBAI: This year's e economic survey has flagged off the dangers of higher crude oil price and its potential impact on India's huge subsidy bill. The survey makes the point that controlling expenditure on subsidies would be crucial. The domestic prices of petroleum products, particularly diesel and LPG need to be raised in line with their prices prevailing in the international market, the government's economi report card says.

 

Weighed against this backdrop, the prospects of the Finance Minister unveiling a few measures to help curtail petroleum subsidies in FY14 appear bright. One such measure could be to restrict the per liter subsidy on diesel and kerosene and per cylinder for LPG. Any step in this direction will be positive for petroleum companies and will help the sector's re-rating. However, the benefits won't be uniform. For oil marketing companies such as Indian Oil, BPCL and HPCL the benefit will be marginal — mainly an improved cash flow that will reduce working capital loans and, hence, interest burden.

 

Ultimately the burden of subsidies is borne by the government and upstream oil companies such as ONGC, Oil India and Gail and, thus they will be the biggest beneficiaries of any subsidy cuts. The net realisation of ONGC, for instance was just $46.9 per barrel for the April - December 2012 period, although crude oil price averaged $109.7. The company shared Rs 37,108 crore towards subsidy during this period. Thus a reduction in subsidy will improve ONGC's net realisation and would add Rs.9000.000-9300.000 Millions to annual top line.

 

MORE FUEL PRICE INCREASE ON THE ANVIL

01.03.2013

 

New Delhi: By significantly reducing the petroleum subsidy outgo for 2013-14, finance minister P. Chidambaram has laid the road map for increasing the prices of fuels such as cooking gas, diesel and kerosene.

 

The government has estimated the petroleum subsidy outgo at Rs.650000.000 Millions for 2013-14, a cut of more than 32% from the revised estimate of Rs.968798.700 Millions for 2012-13. The revised estimate is almost 122% higher than the budgeted estimate of Rs.435800.000 Millions.

 

The government removed pricing of diesel from the purview of the administered price mechanism (APM) in January, after having allowed refiners to fix petrol prices since June 2010.

 

Domestic cooking gas and kerosene fall under the APM of the government. Currently, fuel prices are reviewed once a fortnight.

 

The government has articulated its rationale to continue with a gradual increase in diesel prices till losses borne by government-controlled retailers such as Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd are wiped out. These state-run firms lose Rs.9.22 per litre because of selling diesel below the cost of production and Rs.1.32 per litre on petrol.

 

The government has budgeted for an outgo of Rs.2209715.000 Millions on account of all major subsidies, including on fertilizer, food and petroleum, for 2013-14. This number is 10.8% lower than the revised estimate of Rs.2478539.700 Millions for 2012-13. The budget estimate for subsidy bill for 2012-13 was Rs.17955.410 Millions.

 

Total under-recoveries—the difference between market prices and fuel retail rates—to be borne by oil marketing firms this fiscal year is expected at Rs.1.67 trillion, according to the petroleum ministry. The retailers lost Rs.1.24 trillion until December on account of selling diesel, kerosene and cooking gas at government-fixed prices. The total loss from selling fuel below cost in the fiscal year which ended March 2012 was Rs.1.44 trillion.

 

GOVT EYES MORE INVESTMENTS IN ENERGY SECTOR

01.03.2013

 

New Delhi/Mumbai: Electricity generated from imported coal will become costlier by around 3.5 paise a unit after finance minister P. Chidambaram on Thursday removed duty concessions granted in last year’s budget

.

Instead, he imposed an equal duty on different types of coal imported for electricity generation in the budget for 2013-14. This follows an increase in railway freight rates for coal announced on Tuesday.

 

However, to attract investments to energy projects that are capital-intensive, such as power generation plants and hydrocarbon blocks, the budget allowed for deduction of investment allowance of 15% on investments of Rs.100 crore or more in plant and machinery during the next two fiscal years of 2013-14 and 2014-15. This is in addition to depreciation benefits. Currently, no such investment allowance deduction is available. “Steam coal is exempt from customs duty but attracts a concessional CVD (countervailing duty) of 1%. Bituminous coal attracts a duty of 5% and CVD of 6%. Since both kinds of coal are used in thermal power stations, there is rampant mis-classification. I propose to equalize the duties on both kinds of coal and levy 2% customs duty and 2% CVD,” Chidambaram said in his budget presentation.

 

Mint reported on 19 February about a proposed clarification on coal imports meant for electricity generation that would resolve the confusion resulting in Indian customs authorities denying importers fuel duty concessions granted in last year’s budget. “The impact may be incremental now that prices are subdued from recent peaks, but will make it more expensive as international prices may be heading for a rise going by the forward-market transactions,” said Dipesh Dipu, a partner at Jenissi Management Consultants, a Hyderabad-based resources-focused consultancy. India is facing a chronic fuel shortage. In such a scenario, imports hold the key. The size of the market for imported coal that goes into power generation in India is around 80 million tonnes per annum (mtpa). India will need to import 185 million tonnes of coal in 2016-17, which may further add to the financing cost of power projects.

 

“It wouldn’t impact us as fuel costs are a pass through to the customers. We expect the overall increase in electricity tariff due to railway freight hike and today’s announcement to be around 5 paise,” said Arup Roy Choudhury, chairman and managing director of NTPC Ltd, India’s largest power generation utility with a capacity of 40, 174 MW. The government plans to devise a public-private partnership (PPP) policy framework with Coal India Ltd to attract the private sector as partners to increase the domestic coal production.

 

In addition, the budget also extended a tax holiday under section 80-IA of the Income-Tax Act for power projects, which ends on 31 March, by another year and announced a generation-based incentive for wind-energy projects to discourage investments aimed at availing tax concessions. The government will also spend Rs.1,840 crore for connecting the Ladakh region to the northern region electricity grid. To promote other environment-friendly energy projects, the government will also provide low-interest-bearing funds to the Indian Renewable Energy Development Agency for lending. Noting that the country tosses out several thousand tonnes of garbage each day, Chidambaram said the government will evolve a scheme to encourage cities and municipalities to take up waste-to-energy projects in the form of public-private partnerships, employing different technologies.

 

Waste-to-energy plants, however good an idea, have not worked in the country, according to Sunita Narain, director general of Centre for Science and Environment, a Delhi-based environment advocacy institute. To arrest rapidly diminishing interest in the Indian hydrocarbon sector, the budget announced a move towards a revenue-sharing model from a profit-sharing one in calculating the share of earnings that operators of oil and gas block have to pay it. This is in line with the recommendations of the Rangarajan committee on formulating new production-sharing contracts.

 

“Revenue share replacing profit share will help investors not get subjected to cost scrutiny and likes of CAG (Comptroller and Auditor General) audits,” said Deepak Mahurkar, leader, oil and gas, PwC India, a consultancy. “However, withdrawal of the cost-recovery mechanism exposes investors to more risks and that may dissuade large oil companies from India.” “Although this announcement removes certain uncertainties in terms of capital cost padding, it brings in additional complication of industry not attracting risk capital,” said Debasish Mishra, senior director at Deloitte Touche Tohmatsu India Private Limited, an audit and consutancy firm.

 

This comes in the backdrop of the petroleum ministry’s proposal to deny Reliance Industries Limited $1.24 billion in costs for the deepwater KG-D6 fields for 2010-11 and 2011-12. “The natural gas pricing policy will be reviewed and uncertainties regarding pricing will be removed,” Chidambaram said. “A key next step should be the transition of prices of domestic natural gas to import parity in the next three years, similar to the diesel price reforms,” said Sashi Mukundan, regional president and head of country, BP India, an oil firm.

 

JET FUEL PRICE HIKED BY 3.8%

01.03.2013

 

NEW DELHI: Jet fuel prices were today hiked by 3.8 per cent, the second increase in rates in as many months. Aviation Turbine Fuel, or ATF, price at T3 terminal in Delhi was hiked by Rs 2,519.83 per kilolitre (kl), or 3.8 per cent, to Rs 70,080.87 per kl from midnight tonight, according to Indian Oil Corp, the nation's largest fuel retailer. The increase comes on back of a 2 per cent or Rs 1,324.84 per kl hike in rates effected from February 1.

 

GUJARAT RAKES IN RS 158 CR VAT FROM CNG

01.03.2013

 

GANDHINAGAR: The state government has earned Rs.1586.000 Millions as value added tax (VAT) from CNG. VAT on CNG in Gujarat is 15%. Gujarat's finance minister Nitin Patel, in a written reply to a question by Godhra MLA C K Raulji said that VAT was not charged on the quantity of gas sold but was calculated on its price. Replying to a question by Viramgam MLA Tajeshreeben Patel, the finance minister said that in 2011 the income from VAT on petrol was Rs.17343.400 Millions and that the figure increased to Rs.19134.400 Millions in 2012. Similarly in 2011, income from VAT on diesel was Rs.36601.300 Millions and it increased to Rs.39521.800 Millions in 2012. He said the 2011 VAT CNG income was Rs.1677.700 Millions and it decreased to Rs.1586.000 Millions in 2012.

 

Nitin Patel had, after presenting the state budget on February 20, ruled out any decrease in VAT on petrol and diesel. He had said, "It is like the state government increasing taxes and then asking corporations to decrease their tax revenues." However, officials said the increase cannot be attributed to the increasing price of petrol and diesel alone. The greater number of vehicles has also resulted in the increase. The government had said that in the year 2011 the income from VAT on diesel and petrol was Rs.53944.200 Millions and the figure increased to Rs.58656.200 Millions in 2012.

 

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                           None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                        None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                        None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.54.28

UK Pound

1

Rs.82.06

Euro

1

Rs.70.23

 

INFORMATION DETAILS

 

Report Prepared by :

BSN

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

8

OPERATING SCALE

1~10

8

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

9

--PROFITABILIRY

1~10

9

--LIQUIDITY

1~10

9

--LEVERAGE

1~10

8

--RESERVES

1~10

9

--CREDIT LINES

1~10

8

--MARGINS

-5~5

-

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

Yes

--LITIGATION

YES/NO

No

--OTHER ADVERSE INFORMATION

YES/NO

No

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

No

--EXPORT ACTIVITIES

YES/NO

Yes

--AFFILIATION

YES/NO

Yes

--LISTED

YES/NO

Yes

--OTHER MERIT FACTORS

YES/NO

Yes

DEFAULTER

 

 

--RBI

YES/NO

No

--EPF

YES/NO

No

TOTAL

 

75

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

-

NB

                                       New Business

-

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.