The Board of Directors is pleased to present the 62nd Annual Report on the performance
of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31st March, 2015.
PERFORMANCE OVERVIEW Group Performance
BPCLs Refineries at Mumbai and Kochi, together with its subsidiary company,
Numaligarh Refinery Limited (NRL) and including 50% throughput of Joint Venture Company,
Bharat Oman Refineries Limited (BORL), aggregated a throughput of 29.27 Million Metric
Tonnes (MMT) in 2014-15, in comparison to 28.69 MMT in 2013-14. The BPCL Group generated
market sales of 34.95 MMT during 2014-15, as compared to 34.31 MMT in the previous year.
The groups exports of petroleum products in 2014-15 stood at 2.22 MMT as against
3.06 MMT in 2013-14.
The group recorded a Gross Revenue from Operations of Rs 2,58,731.09 crores in 2014-15,
as compared to Rs 2,76,019.55 crores achieved in 2013-14. The Profit after Tax for 2014-15
was Rs 5,082.01 crores, as against Rs 4,052.98 crores in the previous year. After setting
off the minority interest, the Group earnings per share stood at Rs 66.47 in the current
year, up from Rs 54.08 in 2013-14.
CONSOLIDATED GROUP RESULTS
|Crude Throughput (MMT)
|Market Sales (MMT)
|Gross Revenue from Operations
|Less: Excise Duty
|Net Revenue from Operations
|Profit before Depreciation, Finance Costs and Tax
|Depreciation & amortization expense
|Profit before tax
|Provision for taxation Current (Net of MAT Credit Entitlement)
|Profit after Current Tax
|Provision for taxation Deferred (Asset)/Liability
|Short /(Excess) provision for Taxation in earlier years provided for
|Net Income of the group attributable to BPCL
|Group Earnings per share attributable to BPCL (Rs)
|Crude Throughput (MMT)
|Market Sales (MMT)
|Gross Revenue from Operations
|Less: Excise Duty
|Net Revenue from Operations
|Profit before Depreciation, Finance Costs and Tax
|Depreciation & amortization expense
|Profit before tax
|Provision for Taxation Current (Net of MAT Credit Entitlement)
|Provision for Taxation Deferred
|Short/(Excess) provision for taxation in earlier years provided for
|Balance brought forward
|Amount available for disposal
|The Directors propose to appropriate this amount as under:
|Final (proposed) Dividend
|Towards Corporate Dividend Tax
|For transfer to Debenture Redemption Reserve
|For transfer to General Reserve
|Balance carried to Balance Sheet
|Summarized Cash Flow Statement :
|Inflow/(Outflow) from operations
|Inflow/(Outflow) from investing activities
|Inflow/(Outflow) from financing activities
|Net increase/(decrease) in cash & cash equivalents
During the year 2014-15, the crude throughput achieved by BPCLs refineries at
Mumbai and Kochi was 23.36 MMT, as against 23.35 MMT recorded in 2013-14. The market sales
of the Company increased to 34.45 MMT in 2014-15, from 34.00 MMT in 2013-14, thus
registering a growth of 1.32%.
BPCLs Gross Revenue from Operations for 2014-15 was Rs 2,53,254.86 crores, 6.57%
lower than the previous years revenues of Rs 2,71,051.81 crores. The Profit before
Tax generated for the year was Rs 7,415.51 crores, as against Rs 5,948.98 crores in
2013-14. The Profit after Tax for the year stood at Rs 5,084.51 crores, as against Rs
4,060.88 crores recorded in 2013-14, after providing for tax, (including deferred tax) of
Rs 2,331.00 crores, as compared to Rs 1,888.10 crores during the last year. This is the
first time in the history of the Company that the net profit has exceeded Rs 5,000 crores
in a single financial year.
The earnings per share achieved in 2014-15 was Rs 70.32, as compared to Rs 56.16 in
2013-14. Internal cash generation during the year was higher at Rs 5,989.18 crores, 30%
more than the level of Rs 4,585.64 crores in 2013-14. BPCLs contribution to the
exchequer by way of taxes and duties during 2014-15 stood at Rs 51,121.77 crores, as
against Rs 43,602.22 crores in the previous financial year. BPCLs net worth as on
31st March, 2015 was Rs 22,467.48 crores, as compared to Rs 19,458.76 crores at the end of
the previous year.
The Board of Directors has recommended a dividend of 225% ( 22.50 per share) for the
year on the paid-up share capital of Rs 723.08 crores. The amount of dividend totaling to
Rs 1,921.21 crores, inclusive of Rs 294.27 crores for Corporate Dividend Tax on
distributed profits, shall be dispensed from the profit after tax for the year.
Transfer to Reserves
The Company proposes to transfer Rs 2,968.95 crores to the General Reserve out of the
amount available for appropriation and an amount of Rs 500.00 crores is proposed to be
retained as Surplus in the Statement of Profit and Loss.
Borrowings from banks decreased by almost 50% to Rs 6,925.26 crores as at 31st March
2015, from Rs 13,843.68 crores as at 31st March, 2014. Loans from Oil Industry Development
Board have increased to Rs 1,049.50 crores as at 31st March, 2015, as compared to Rs
321.25 crores at the end of the previous year. Debentures worth Rs 700 crores issued
during the year 2012-13 continue to remain outstanding as on 31st March, 2015. 4.625% US
Dollar International Bonds issued during
2012-13ofUSD500Million(equivalentto3,129.54crores) and 3% Swiss Franc International Bonds
issued during 2013-14 of CHF 200 Million (equivalent to Rs 1,293.30 crores) remained
outstanding as on 31st March, 2015. During the year 2014-15, the Company set up a Medium
Term Note (MTN) Program to facilitate the raising of funds on a regular basis from the
international debt capital markets, with the aggregate nominal amount of Notes outstanding
under the program not exceeding USD 2 billion (or its equivalent in other currencies).
Deposits from Public
During the year, the Company has not accepted any deposits from the public. However,
unclaimed matured deposits of Rs 0.08 crores as at the end of the year, pertaining to 21
depositors in the books, are being transferred to the Investor Education and Protection
Fund after due dates.
The total Capital Expenditure incurred during the year 2014-15 amounted to Rs 8,494.40
crores, as compared to Rs 5,560.39 crores during the year 2013-14.
C& AG Audit
The Comptroller and Auditor General of India (C&AG) has no comment upon or
supplement to the Statutory Auditors Report on the Accounts for the year ended 31st
March 2015. The letter from C&AG is annexed as Annexure E.
REFINERIES MUMBAI REFINERY
During the year 2014-15, Mumbai Refinery achieved throughput of 12.96 MMT of feedstock
(crude oil and other feedstock), as against 13.03 MMT achieved in 2013-14. Mumbai Refinery
has achieved this level of throughput, despite having planned shutdown of one of the crude
processing units and associated secondary facility during the year. This represents a
capacity utilization of 108.0%, as compared to 108.6% in the previous year. The reduction
in crude throughput is basically due to the higher captive production of Reformate, which
has been, hitherto imported to meet Motor Spirit (MS) demand during 2013-14. During the
year, the refinery achieved its highest ever production of MS, High Speed Diesel (HSD) and
Lube Base Oils, meeting the demand for MS and HSD complying with Euro-IV quality norms.
The Gross Refining Margin (GRM) for the year stood at USD 3.97 per barrel, as compared
to USD 3.95 per barrel realized in 2013-14. The overall gross margin for the refinery in
2014-15 amounted to Rs 2,363 crores, as compared to Rs 2,340 crores in 2013-14. The higher
GRM in Mumbai Refinery for the year 2014-15 is attributable to higher distillate yield,
better product mix pursuant to commissioning of the Continuous Catalytic Reformer (CCR)
Unit and reduction in octroi incurrence partially offset by the impact of the
crude-product price volatility.
Kochi Refinery achieved the highest ever crude throughput of 10.40 MMT in 2014-15, as
compared to 10.32 MMT in 2013-14. This is the third year in succession that the throughput
at the refinery has crossed the 10 MMT mark. The capacity utilization of the refinery
during the year was 109.46%, as against 108.65% in the previous year. During the year,
Kochi Refinery recorded its best ever production of LPG, Propylene, Euro-III MS, Euro-III
HSD and Euro-IV HSD. The GRM for the year was USD 3.17 per barrel amounting to Rs 1,514
crores. The refinery had earned a GRM of USD 4.80 per barrel in 2013-14, amounting to Rs
2,249 crores. The major reasons for lower margin during 2014-15 are lower product cracks
and higher inventory valuation loss.
The details of the performance of the Refineries, their activities and future plans are
discussed in the Management Discussion and Analysis Report (MD&A).
During the year 2014-15, BPCLs market sales volume rose to 34.45 MMT, as compared
to 34.00 MMT in the previous year. This represented a growth rate of 1.32% over the
previous year. BPCLs market share amongst the public sector oil companies stood at
23.29% as at 31st March, 2015, as compared to 23.50% as at the end of the previous year.
A detailed discussion of the performance of the Marketing function is given in the
Integrated Refinery Expansion Project (IREP) at Kochi
The project envisages capacity expansion of Kochi Refinery by 6 Million Metric Tonnes
Per Annum (MMTPA) taking it to 15.5 MMTPA and modernisation of processing facilities to
produce auto-fuels conforming to Euro-IV/ V specifications. It also envisages refinery
residue stream upgradation to value added products.
The project involves a capital outlay of Rs 16,504 crores with expected completion in
May, 2016. The project has achieved an overall physical progress of 83.55% with cumulative
expenditure of Rs 7,147 crores as on 30th June 2015. Civil, structural and UG piping jobs
of units and offsites are nearing completion. The foundations of all major equipments have
been completed and all major tenders and orders have been placed. More than 75% of the
equipment has been received at site. Mechanical jobs like piping, fabrication, erection
and equipment erection are in progress at units and offsites. About 1,000 equipment out of
a total of 2,060 have been erected on foundations, which include all three gas turbine
generators, crude and vacuum columns, DHDT reactors, VGO and DHDT recycle gas compressors.
Electrical and instrumentation jobs have commenced. Package jobs like reactor-regenerator
package of FCCU, coke drum structure and coke handling packages, heaters, water packages,
utility boilers are progressing at site and a few are nearing completion. The hydrotesting
of one out of the two utility boilers has been completed. Two raw water quarries for
storage of water from the Periyar River have been commissioned.
A workforce of more than 14,000 labourers has been engaged on a daily basis and works
at site progress on a 24x7 basis. Monthly meetings of unions, contractors, and Project
Management Consultant (PMC) with the Regional Labour Commissioner help maintain a healthy
labour climate. The Government of Kerala continues to provide proactive support to the
project and reviews are being held even at the level of the Chief Minister.
The Board has given approval for diversification into Petrochemicals at an estimated
capital cost of Rs 4,588 crores. BPCL plans to produce niche petrochemicals such as
Acrylic Acid, Acrylates and Oxo Alcohols, that are predominantly being imported into the
country. Such niche products will be produced using Polymer Grade Propylene that will be
available on the completion of the IREP project. The major end uses of these chemicals are
in paints and coatings, adhesives, plasticisers, solvents and water treatment. The unit is
expected to come on stream during the year 2018-19.
Replacement of CDU /VDU at Mumbai Refinery
The project envisages installation of a state-of-the-art integrated Crude and Vacuum
Distillation Unit (CDU-4) of 6 MMTPA capacity to improve mechanical integrity, enhance
safety and meet environment norms. The approved cost of the project is Rs 1,419 crores.
The overall physical progress of project is 97.2% with cumulative expenditure of Rs
1,171 crores as on 30th June 2015. Pre-commissioning and commissioning activities at site
are in progress.
Kota Jobner Pipeline Project:
The project involved laying a 210 km long and 14" dia cross-country pipeline from
Kota to Jobner (near Jaipur) for economic transportation of MS/SKO/HSD from BPCLs
Mumbai Refinery as well as BORLs refinery at Bina. Petroleum and Explosives Safety
Organisation (PESO) license has been obtained and the pipeline has been commissioned on
31st March, 2015 with an expenditure of Rs 230 crores as on 30th June, 2015.
Pipeline for Transfer of LPG from BPCR / HPCR Mumbai to Uran
The project envisaged laying a 28 km pipeline (12 km offshore and 16 km onshore) and
provision of three 900 MT Mounded Storage Vessels (MSVs) at BPCLs Uran LPG Plant.
The pipeline is being laid to transfer LPG from BPCLs Mumbai Refinery and the Mumbai
Refinery of Hindustan Petroleum Corporation Limited (HPCL) at a project cost of Rs 276.84
crores. The pipeline portion of the project, costing Rs 229.6 crores, will be shared
equally with HPCL. The MSVs cost around Rs 47.24 crores and are on BPCLs account.
The pipeline was commissioned on 31st October, 2014. The cumulative expenditure of the
project as on 30th June, 2015 is Rs 269 crores.
RESEARCH & DEVELOPMENT (R&D)
In line with constantly changing business needs, the Research and Development Centres
of BPCL are focusing on development of niche and innovative products and process
technologies and providing advanced technical support for refinery processes, lubricant
formulations and product / process development. These centres have achieved significant
breakthroughs in the past few years. They boast of producing more than 20 patents in the
last 5 years and the aspiration is to emerge as a world class technology solution provider
in the near future.
BPCL has R&D facilities at three locations - the Corporate R&D Centre at
Greater Noida, Uttar Pradesh, R&D Product & Application Development Centre at
Sewree, Mumbai and the in-plant R&D Centre at Kochi Refinery. All three centres
provide the Company an edge over competitors and technological breakthroughs for future
The core research areas of the R&D centres are broadly divided into four
categories, namely (a) development of energy efficient technologies for fuel and chemical
production (b) technical support to refining processes (c) new product and additive
development and (d) alternate fuels and energy.
The R&D programs have been discussed separately in the MD&A. Further, the areas
covered under R&D and the benefits derived from R&D activities are detailed in
Annexure A to the Directors Report.
NON-CONVENTIONAL ENERGY INITIATIVES
BPCL has undertaken initiatives in tapping non-conventional energy sources like wind
energy, solar energy and fuel cells, in order to develop such alternate sources of energy.
The improved economics for investment in solar and wind energy and favourable Government
policy for renewable energy has prompted the Company to develop a Renewable Energy Policy
which was approved by the Board. BPCL has installed 5 MW capacity windmills in the hilly
range of Kappatguda in Chitradurga District, Karnataka and a 0.5 MW wind farm in Tamil
Nadu. The windmills are currently working satisfactorily and power produced is sold to the
State electricity grid. In addition to the above, BPCL has commissioned smaller KW scale
solar plants for a total capacity of about 1500 KW for lighting and admin office building
electrical loads at Kochi and Mumbai Refineries, 205 retail outlets, along the
Mumbai-Manmad pipeline, some LPG bottling plants and Lube blending plants. Under the
renewable energy policy, a 4 MW solar plant at Bina Despatch Terminal and a 6 MW grid
connected wind power project are being put up.
BPCL is currently evaluating the option of setting up more solar farms and windmills in
various states, depending on availability of land and other commercial considerations.
The overall industrial relations climate remained peaceful and cordial throughout the
year. All organizational and employee related issues were handled with a collaborative
approach and regular communication was ensured to all employees on all important issues
affecting them and the Organisation.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Through its CSR initiatives, BPCL has widespread impact throughout the country, in and
around our business locations as well as in rural / tribal communities. Every year brings
new learning and using these inputs, we have scaled up various projects, taken up new
projects and exited from certain projects that have attained sustainability. Our core
thrust areas for CSR are education, water conservation, skill development, health and
hygiene and community development.
Improving quality education, which is one of our core thrust areas under CSR, is also
the biggest equalizer in todays world. Education contributes to individual well
being as well as overall development of the country. It enhances the standard of living,
helps in overcoming the problems of poverty and unemployment and brings in social
equality. Therefore, the projects supported by us under education are primarily focused on
improving the quality of learning and bridging the gap that comes in the way
of the learning process and inclusivity.
The Computer Assisted Learning Project (CAL), our flagship project, is for the children
of primary and secondary grades studying in Government schools and low income private
schools. It aims at improving the learning levels of children and making them digitally
enabled through a technology interface. In the year 2014-15, the project was scaled up to
45 new centres in Jaipur (Rajasthan), Mumbai and Solapur (Maharashtra). The earlier
centres in Uran and Lucknow continue to benefit children year after year. Thus, BPCL
reached out to 38,000 new children during the year. Capacity building sessions were
organised with the School Management Committees of the above schools, so that the
committee members are empowered on the rules under the Right to Education Act and also
take more interest and ownership in the education process and learning levels of their
The project also resulted in indirectly generating local level employment, by way of
the Sancharikas (teacher facilitators) for imparting computer education. Every school has
one or two sancharikas (depending on the enrolment of children in the school) adding to a
total of around 100. They are trained in both, technical as well as soft skills, thereby
making them thorough professionals. Our one-of-a-kind Science Education Project, which
provides experiential science learning to children, is executed in collaboration with the
NGO, Agastya International Foundation. The project is for children from 90
Government schools near Solur, Bangalore (Karnataka) and in the year 2014-15, it has been
scaled up to 25 Government schools in and around Chembur, near Mumbai Refinery.
There were about 300 students who have been groomed during the year 2014-15 as Young
Instructor Leaders. They act as peer leaders and help in teaching Science through
experiments to their fellow mates. In the same year, 105 Government school teachers were
trained on the above themes. The training not only composed of clarifying their doubts,
but also on how to use creativity in teaching methods and other activities.
Another flagship project i.e. District-wide Education Project - Akshar
(Read India) for impacting the learning levels of children through learning camps, was
being supported by BPCL in the Districts of Sagar (MP) and Nandurbar (Maharashtra). This
project in 2014-15 was scaled up to cover Dausa and Jaipur (Rajasthan). In Nandurbar and
Sagar, 30 days of learning camps were conducted in Maths and Language to improve the
learning levels of Government school children. 210 schools in Sagar and 180 schools in
Nandurbar encompassing 25,343 students from Class I - V were covered in these camps. After
BPCL intervention, there was a 24% improvement in childrens Reading and Maths levels
in Sagar, while Nandurbar saw a similar 18% improvement in Reading levels.
Along similar lines, our project for educating tribal students in Mayurbhanj and
Sundergarh districts of Odisha has been continued. 4,453 children now have access to
school education. In the coming years, we are now changing the focus of the project to
improving the quality of education, rather than solely complying with the provisions of
the Right to Education Act, the mantra being, "Attending school & learning
well." In 2014-15, we have successfully completed the second batch of our unique
in-house pilot project for professional development of primary teachers, upper primary
school teachers and principals from schools run by the Municipal Corporation of Greater
Mumbai and other low income schools. This program aimed at encouraging teachers to use new
techniques for teaching and classroom management and develop new teaching materials
according to the needs of the class. By working with the teachers and school management,
we are effecting a sustainable change in the existing education system. Additionally, our
employee volunteers too added value in the classroom by telling stories with moral values.
Last year, we had taken up a new library project aimed at impacting literacy and
reading skills and therefore, increasing creative thinking and supplementing learning on
the whole. In the year 2014-15, we have continued supporting 20 libraries in Mumbai and
Delhi and have increased the reach by an additional 5 libraries in Mumbai, where over
3,700 children are benefitted. In addition, these libraries have a special Teachers
section and can be used by the community around the schools as well.
Project BalaJanaagraha was scaled up to include new schools in Kochi, in addition to
those in Bangalore. The project aimed at instilling good citizenry in children as the key
to building good and vibrant nations. This unique civic education project targeted at
creating responsible and proactive citizens through conducting civic sessions in schools,
gave 2,862 children know-how about their rights and duties. Civic fests at the local, city
and national level were held in which the children participated in nationwide
competitions. Citizenship surveys were conducted before and after the program to gauge the
increase in awareness levels of the children.
Our education system often turns out students who are not employable, even after
completing years of studies. With an objective to empower unemployed youth, women and
persons with disabilities near our businesses and also equip them with skills, we have
several NGO partners in different parts of the country. Placement linked vocational
training of 1,000 youth was supported by BPCL near Kochi Refinery, to increase the skills
of the local youth and the economic level of the surrounding community. Training was done
in construction and fabrication related trades as well as hospitality, retail management,
computer accounting and office automation for the youth, women & differently-abled.
Over 70% of these youth have been placed and are being tracked to ensure job retention.
Through training in zardosi and Aari work, about 130 women in Loni earn and save enough
to send their children to school. On an average, each woman adds around Rs 3,000 per month
to the family income. The women are provided inputs on financial management through
self-help groups and forward and backward market linkages, so that they can earn
independently on completion of the project. Towards inclusion and giving the
differently-abled a chance to become economically contributing members of society, we have
several projects for skill training of disabled persons. The LABS project for Persons with
Disabilities in Mumbai and Noida saw 200 youth who were trained and then placed with
various companies. Along similar lines in Kolkata, we trained 80 disabled and
underprivileged youth from economically backward families in Desktop publishing. Our BPCL
volunteers also gave these youth sessions on personality development to help them get
better placement. In various other projects, persons with hearing, visual and physical
disability were given training in skills that