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Bharat Petroleum Corporation Ltd.

BSE: 500547 Sector: Oil & Gas
NSE: BPCL ISIN Code: INE029A01011
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VOLUME 293094
52-Week high 540.70
52-Week low 239.00
P/E 8.35
Mkt Cap.(Rs cr) 69,535
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 326.20
CLOSE 326.10
VOLUME 293094
52-Week high 540.70
52-Week low 239.00
P/E 8.35
Mkt Cap.(Rs cr) 69,535
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharat Petroleum Corporation Ltd. (BPCL) - Director Report

Company director report

The Board of Directors takes pleasure in presenting its Report on theperformance of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31stMarch 2018.

PERFORMANCE OVERVIEW Group Performance

During 2017-18 the aggregate Refinery throughput of BPCL'sRefineries at Mumbai and Kochi along with its Subsidiary Company Numaligarh RefineryLimited (NRL) and considering 50% throughput of Joint Venture Company Bharat OmanRefineries Limited (BORL) was 34.72 Million Metric Tonnes (MMT) as compared to

31.24 MMT during 2016-17. The BPCL Group ended the year with MarketSales of 41.38 MMT as compared to 37.74 MMT during 2016-17. During the year BPCLGroup's exported 2.02 MMT of petroleum product as against 2.50 MMT during 2016-17.During this Financial Year the Group achieved Gross Revenue from Operations of Rs.279312.70 Crores as compared to Rs. 243747.46 Crores in 2016-17. The Net Profitattributable to BPCL stood at Rs. 9008.63 Crores in 2017-18 as against Rs. 8720.94Crores in the previous year. The Group has recorded Earnings per Share of

Rs. 45.80 in the current year as against Rs. 44.34 in 2016-17after setting off the minority interest.

CONSOLIDATED GROUP RESULTS 2017-18 2016-17
Physical Performance
Crude Throughput (MMT) 34.72 31.24
Market Sales (MMT) 41.38 37.74
Financial Performance Rs. in Crores
Gross Revenue from Operations 279312.70 243747.46
Profit before Depreciation Finance Costs and Tax 16955.38 15560.22
Finance Cost 1185.74 696.36
Depreciation & amortization expense 2885.00 2107.64
Share of profit of equity accounted investee (net of income tax) 1288.88 943.39
Profit before Tax 14173.52 13699.61
Provision for Taxation – Current Tax 3195.36 3168.28
Provision for Taxation – Deferred Tax 1452.24 1135.60
Short / (Excess) provision for Taxation for earlier years (265.99) (111.24)
Net Profit for the year 9791.91 9506.97
Minority Interest 783.28 786.03
Net Profit attributable to BPCL 9008.63 8720.94
Other Comprehensive Income attributable to BPCL 455.35 332.33
Total Comprehensive Income attributable to BPCL 9463.98 9053.27
Group Earnings per share attributable to BPCL (Rs.) 45.80 44.34

Company Performance

During the year 2017-18 the crude throughput at BPCL's Refineriesat Mumbai and Kochi was 28.54 MMT as against 25.39 MMT achieved in 2016-17. The Marketsales of the Corporation grew by 9% to 41.21 MMT in 2017-18 from 37.68 MMT in 2016-17.

BPCL's Gross Revenue from Operations for 2017-18 stood at Rs.277162.23 Crores reflecting an increase of 14.51% over the previous year's revenuesof Rs. 242047.82 Crores. The Profit before Tax for the year was Rs. 11198.01Crores as compared to Rs. 11042.79 Crores in 2016-17. After providing for Tax (includingdeferred tax) of Rs. 3278.67 Crores as against Rs. 3003.49 Crores during the last yearthe Profit after Tax for the year stood at Rs. 7919.34 Crores as against Rs. 8039.30Crores in 2016-17.

COMPANY STANDALONE RESULTS 2017-18 2016-17
Physical Performance
Crude Throughput (MMT) 28.54 25.39
Market Sales (MMT) 41.21 37.68
Financial Performance Rs. in Crores
Gross Revenue from Operations 277162.23 242047.82
Profit before Depreciation Finance Costs and Tax 14679.74 13429.98
Finance Cost 833.25 495.87
Depreciation & amortization expense 2648.48 1891.32
Profit before tax 11198.01 11042.79
Provision for Taxation - Current Tax 2110.00 2210.00
Provision for Taxation - Deferred Tax 1434.66 904.73
Short/(Excess) provision for taxation of earlier years (265.99) (111.24)
Net Profit for the year (A) 7919.34 8039.30
Other Comprehensive Income (OCI) 9.11 132.43
Total Comprehensive Income for the year 7928.45 8171.73
Opening Balance of Retained Earnings (B) 3074.56 1422.46
Amount available for disposal (A+B) 10993.90 9461.76
The Directors propose to appropriate this amount as under:
Towards Dividend:
Final Dividend of previous year 144.62 1084.63
Corporate Dividend Tax on Final Dividend of previous year - 169.81
Interim Dividend 3036.95 4555.43
Corporate Dividend Tax on Interim Dividend 420.49 828.23
For transfer to Debenture Redemption Reserve 297.74 224.58
For transfer to General Reserve 2400.50 -
Income from BPCL Trust for Investment in Shares (296.81) (526.17)
Re-measurements of Defined Benefit Plans (Net of tax) (24.36) 50.69
Closing Balance of Retained Earnings 5014.77 3074.56
Summarized Cash Flow Statement:
Cash Flows:
Inflow/(Outflow) from Operating Activities 8974.67 7896.93
Inflow/(Outflow) from Investing Activities (4749.52) (10129.68)
Inflow/(Outflow) from Financing Activities (4203.77) 566.56
Net increase/(decrease) in cash & cash equivalents 21.38 (1666.19)

The Earnings per Share amounted to Rs. 40.26 in 2017-18 ascompared to Rs. 40.87 in 2016-17. The Earnings per Share is after adjustment of BonusShares issued during 2017-18 and BPCL Trust for Investment in Shares. Internal CashGeneration during the year was higher at Rs. 7139.42 Crores as against Rs.5716.10 Crores in 2016-17 mainly due to higher depreciation and Deferred Taxduring 2017-18.

As per Regulation 43A of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the top five hundredlisted entities shall formulate a dividend distribution policy. Accordingly a DividendDistribution policy has been adopted to set out the parameters and circumstances that willbe taken into account by the Board in determining the distribution of Dividend to itsshareholders and/or retaining the profit into the business. The policy is enclosed asAnnexure J to the Board Report and is available on the Corporation's website athttps://www.bharatpetroleum. com/about-bpcl/our-policies.aspx BPCL's contribution tothe exchequer by way of Taxes Duties and Dividend during 2017-18 amounted to

Rs. 89725.13 Crores as against Rs. 84758.84 Crores in the previousFinancial Year. As on 31st March 2018 BPCL's Total equity stands at Rs.34152.00 Crores as against the previous year's figure of Rs. 29668.38 Crores.

Dividend

The Board of Directors has recommended a Final Dividend of Rs. 7 perequity share (i.e. @ 70% of the paid-up share capital) for the year on the paid-up sharecapital of Rs. 2169.25 Crores which amounts to Rs. 1830.60 Crores inclusive of Rs.312.12 Crores for Dividend Distribution Tax. In addition Interim Dividend of Rs. 14 perequity share (i.e. @ 140% of the paid up share capital) totalling Rs. 3457.44 Croresinclusive of Rs. 420.49 Crores for Dividend Distribution Tax was declared and distributedduring the year.

Bonus Shares

During the Financial year 2017-18 the Corporation has issued BonusShares in the ratio of 1:2 by capitalisation of General Reserves.

Transfer to Reserves

It is proposed to transfer Rs. 2400.50 Crores to the General Reserveand Rs. 297.74 Crores to the Debenture Redemption Reserve out of the amount available inRetained Earnings.

Divestment of Shares

During the year the Government of India disinvested 13505341 equityshares in favour of Bharat 22 ETF

(an exchange traded fund inclusive of PSU stocks). Consequently theholding of the President of India in the equity share capital was reduced to 54.31% from54.93%.

Borrowings

Borrowings from banks decreased to Rs. 11364.43 Crores as at 31stMarch 2018 from Rs. 11737.95 Crores as at 31st March 2017. Loans from OilIndustry Development Board stand at Rs. 1357.94 Crores as at 31st March 2018as compared to Rs. 1795.13 Crores at the end of the previous year. Debentures worth Rs.750 Crores were issued during the year 2017-18. The total Debentures outstanding as at 31stMarch 2018 were

Rs. 1299.52 Crores. 4.625% US Dollar International bonds issued during2012-13 of USD 500 Million (equivalent to Rs. 3238.55 Crores) remained outstanding as on31st March 2018. 3% Swiss Franc International Bonds issued during 2013-14 ofCHF 200 Million (equivalent to Rs. 1363.01 Crores) remained outstanding as on 31stMarch 2018. 4% US Dollar International bonds issued during 2015-16 of USD 500 Million(equivalent to

Rs. 3227.22 Crores) remained outstanding as on 31stMarch 2018.

Deposits from Public

The Corporation has not accepted any deposit from the public during theyear. The amount of deposits matured but unclaimed at the end of the year were Nil. Theunclaimed amount is being transferred to the Investor Education and Protection Fund afterthe respective due dates.

Capital Expenditure

Capital Expenditure (before Cenvat/Tax Credit) including investments inJVCs and exploration through a Subsidiary Company during the year 2017-18 amounted to Rs.8997.76 Crores (Budget estimate of Rs. 7800.64 Crores) as compared to Rs. 16600.85Crores during the year 2016-17.

C&AG Audit

The Comptroller and Auditor General of India's (C&AG) commentupon or supplement to the Statutory Auditors' Report on the Accounts for the yearended 31st March 2018 is annexed as Annexure E.

As at 31.03.2018 there are five pending published paras related to theC&AG audit. These relate to extension of credit facility to a defaulter companyimplementation of PAHAL (DBTL) Scheme for LPG payment of stagnation relief to employeespayment towards encashment of employee leave together with employer's share of EPFcontribution and payment of shift allowance to executives. The audit objections have beensuitably replied to and the same are under their review.

REFINERIES Mumbai Refinery

Mumbai Refinery achieved the highest ever crude processing of 14.1 MMTand total throughput of 14.29 MMT (crude oil and other feedstocks) as against crudeprocessing of 13.54 MMT & total throughput of 13.60 MMT achieved in 2016-17. Thisrepresents a capacity utilization of 119% as compared to 113.3% in the previous year.Mumbai Refinery achieved the highest ever Gross Refining Margin (GRM) for the year 2017-18at USD 7.26 per barrel as compared to USD 5.36 per barrel realized in 2016-17. Theoverall gross margin for the refinery in 2017-18 amounted to Rs. 5023 Crores (37% higher)as compared to Rs. 3671 Crores in 2016-17.

Kochi Refinery

Kochi Refinery achieved the highest ever crude processing of 14.1 MMTand total throughput of 14.25 MMT (crude oil and other feedstocks) with the successfulcommissioning of all the process units of the Integrated Refinery Expansion Project asagainst crude processing of 11.82 MMT & total throughput of 11.79 MMT achieved in2016-17. This represents a capacity utilization of 115% as compared to 107.5% in theprevious year. The Gross Refining Margin (GRM) for the year also increased to USD 6.44 perbarrel as against USD 5.16 per barrel realized in 2016-17. The gross margin for theRefinery in 2017-18 is Rs. 4333 Crores (41.5% higher) as against the previous financialyear figure of Rs. 3061 Crores.

PIPELINES

The BPCL Group owns a network of 2241 km of multiproduct pipelineswith design capacity of 17.84 MMT. BPCL Pipelines completed two decades of successfuloperations & service to Refinery & Marketing SBUs on 29th March 2018.Pipelines have achieved a throughput of 14.97 MMT in the year 2017-18 which is about 6%higher than the previous year. Petroleum product movement through pipelines was 5728MMTKM across northern central western & southern parts of the country.

In order to meet its commitment towards the environment the firstparcel of BS VI products for National Capital Territory (NCT) was launched from Bina on30.01.2018. A total of 38 TMT of BS VI products were delivered to Delhi by 31.03.2018.

BPCL Pipelines started pumping ATF ex-Bina Refinery in August 2017 and36 TMT of ATF has been delivered to the Delhi market till 31.03.2018. This has resulted inadditional reduction of carbon footprint equivalent to movement of about 10 BTPN rakesfrom Bina to Bijwasan.

BPCL is in the process of finalizing its pipeline expansion plan toincrease its share of pipeline transportation to 65% by the year 2029-30.

MARKETING

During the year 2017-18 BPCL's market sales volume increased by9.37% to 41.21 MMT as compared to 37.68 MMT in the previous year. BPCL's market shareamongst public sector oil companies stood at 23.75% as at 31st March2018 as compared to 22.77% as at the end of the previous year.

A detailed discussion of the performance of the Marketing function isgiven in the Management Discussion & Analysis Report (MD&A).

MAJOR PROJECTS

LPG Import Facility at Haldia

Continuous growth in the demand of LPG in the eastern part of UPrequirement of a reliable product source for Eastern Region and evacuation of theadditional production of LPG from Kochi Refinery after its expansion were the triggers tohave a dedicated coastal LPG storage facility with a capability of storing Propane Butane& LPG for an average throughput of 1.0 MMTPA with facility of two 15 TMT Cryogenicstorage 8 Bay TLF Gantry Flash Gas & Boil Off Gas Compressors and associatedCryogenic Facilities and two 18" Twin Refrigerated Pipeline from Haldia Oil Jetty- 3to Haldia LPG Terminal.

The project has achieved overall physical progress of 78.6% and thecumulative expenditure on the project is Rs. 426.22 Crores as on 30.06.2018. The projectis scheduled for mechanical completion by October 2018.

Irugur Railway Siding

A tank wagon loading Railway Siding at Irugur was envisaged to meet thedemand of evacuation of MS / HSD due to expansion of Kochi refinery with facilities ofautomated tank wagon loading gantry (621 M for 50 wagons) to handle MS / HSD Pump House& Siding Planning Room. The approval for the tank wagon loading railway siding wasgiven on 22.07.2018 with an approved cost of the project of Rs. 89.90 Crores. The projecthas achieved overall physical progress of 100% and the cumulative expenditure on theproject is Rs. 52.49 Crores as on 30.06.2018. The project is mechanically completed as perschedule on 30.06.2018.

Additional Tankage Works at Devangonthi

BPCL has an existing installation at Devangonthi but doesn't havesufficient tankage to cater to the marketing & operational requirements of evacuationof MS/HSD due to expansion of Kochi Refinery. Therefore it was envisaged to have 4 newtanks viz additional tanks of 2 X 17500 KL (Floating roof) for MS and 2 X 20000 KL (Coneroof) for HSD in Devangonthi along with construction of new pump house associatedpipelines control room and terminal automation with integration of old facilities. Theapproved cost of the project is Rs. 121.0 Crores. The project has achieved overallphysical progress of 41% and the cumulative expenditure on the project is Rs. 16.92 Croresas on 30.06.2018. The project is scheduled for mechanical completion by December 2018.

POL Terminal Haveli Pune

In order to mitigate the supply limitation and infrastructureconstraints and reduce dependency of Pune Retail Territory on hospitability arrangement ofHPCL to meet BPCL's growing demand for MS/HSD it was envisaged to have a rail fedPOL terminal in Pune. Therefore 67.93 acres of land was secured at Village Tarde 25 KMfrom Pune for a rail fed POL terminal with a capacity of 45846 KL to store MS HSD SKOEthanol and Biodiesel with tank wagon unloading railway siding and 12 bay tank lorryfilling gantry to feed the Pune market.

The approved cost of the project is Rs. 267 Crores. The project hasachieved overall physical progress of 12% and the cumulative expenditure on the project isRs. 41.07 Crores as on 30.06.2018. The project is scheduled for mechanical completion byJuly 2020.

LPG Plant at Bolangir

Over the last five years there has been continuous increase incapacity utilization of LPG bottling plants primarily driven by BPCL's expansion ofLPG supplies and distribution in eastern parts of India. In line with the requirementenvisaged and to tap untapped potentials of Odisha market it was proposed to construct anew 44 TMTPA LPG Bottling Plant at Bolangir. Therefore 23.12 acres of land was secured atBolangir (295 KM from Bhubaneshwar Airport and 12 KM from Bolangir Railway station) to setup an LPG plant with facilities i.e. (3 x 300 MT MSV 8 Bay TLD 24 Stn electroniccarousel fire water tanks of 1853 kl capacity).

After getting all the statutory & environmental approvals on22.03.2018 the project started in September 2019. The approved cost of the project is Rs.103.12 Crores. The project has started in March 2018. The project has achieved overallphysical progress of 17% and the cumulative expenditure on the project is Rs. 2.13 Croresas on 30.06.2018. The project is scheduled for mechanical completion by March 2020.

Heat Traced Pipeline in Mumbai Refinery

The project envisages laying of a Heat Traced Pipeline and associatedfacilities in Mumbai Refinery for transporting High Pour products. The approved cost ofthe project is

Rs. 193 Crores.

The project has achieved a physical progress of 73.3% and thecumulative expenditure on the project is Rs. 42 Crores as on 31.03.2018. The project isscheduled for mechanical completion by January 2019.

Gasoline Hydro Treatment Unit (GTU) at Mumbai Refinery

The project envisages installation of a Gasoline Hydro Treatment Unit(GTU) to produce 100% BS VI MS. The approved cost of the project is Rs. 554 Crores.

The project has achieved a physical progress of 34.10% and thecumulative expenditure on the project is Rs. 68 Crores as on 31.03.2018. The project isscheduled for mechanical completion by December 2019.

Propylene Derivative Petrochemical Project (PDPP) at Kochi Refinery

The project envisages production of niche petrochemicals utilizingPolymer Grade Propylene produced from the Petro FCCU being set up as part of IREP. ThePDPP project envisages production of Acrylic Acid Oxo Alcohols and Acrylates utilizingapproximately 250000 MT per annum of Polymer Grade Propylene. The approved cost of theproject is Rs. 5246 Crores. The project has achieved an overall physical progress of 61%and the cumulative expenditure on the project is Rs. 1490 Crores as on 31.03.2018 withscheduled mechanical completion in February 2019.

Heat Traced Pipeline (HTPL) in Kochi Refinery

The project envisages laying of a Heat Traced Pipeline and associatedfacilities in Kochi Refinery for transporting High Pour products. The approved cost of theproject is

Rs. 337.06 Crores.

The physical progress is 70.40% and the cumulative expenditure on theproject is Rs. 104 Crores as on 31.03.2018. Project is scheduled for mechanical completionby August 2018.

BS VI Motor Spirit Block Project (MSBP) at Kochi Refinery

The Project MS Block envisages putting up facilities for the productionof 100% BS VI grade MS from Kochi Refinery to meet the Auto Fuel Vision and Policy 2025requirements. The approved project cost is

Rs. 3313 Crores.

The physical progress is 20.01% and the cumulative expenditure on theproject is Rs. 142 Crores as on 31.03.2018. The project is scheduled for mechanicalcompletion by October 2019.

Mumbai Manmad Pipeline Re-routing

The project envisages laying of a 50 km long 18" Dia API 5L x 65pipeline for rerouting of the Mumbai Manmad Pipeline section construction of 3Sectionalising Valve stations (SV stations) and associated facilities. The approved costof the project is Rs. 449.58 Crores The project has achieved overall physical progress of50.13% and the cumulative expenditure on the project is

Rs. 103 Crores as on 31.03.2018. The project is scheduled formechanical completion in June 2019.

RESEARCH & DEVELOPMENT

The energy sector is witnessing unprecedented developments anddisruptive innovations such as electrical vehicles in the transport sector biofuels andsolar power which can potentially change our business. Neverthless there are burgeoningopportunities for value added petroleum products and petrochemicals. To keep pace with thechanging market demand the Research and Development Centers of BPCL are proactivelyengaged in development of innovative products / process technologies and cleaner fuels /fuel additives to reduce environmental footprints while improving the Company'sprofitability.

In line with this prelude the Corporate R&D Centre at GreaterNoida Uttar Pradesh and Product & Application Development Centre at Sewree Mumbaiare continuously striving for value creation through research activities. The researchwork is broadly divided into four categories as per focus research areas: (a) Technicalsupport to Strategic Business Units (SBUs) (b) Development of energy efficienttechnologies for fuel and chemical production (c) New product and additive development and(d) Alternative fuels and energy.

The benefits due to research activities are summarized in Annexure A.

The Product and Application Development setup comprises of R&DTechnical Services Quality Assurance and Original Equipment Manufacturers (OEM) Teams.These units are the backbone for the Lubes Business Unit and provide competitive advantageto Business operations through continuous innovation in the areas of lubricants newproduct development value added services to customers and major OEM tie-ups.

R&D has contributed significantly to the business volume andprofitability through development of new grades and alternate formulations. This hashelped in increasing our product portfolio and reducing our input cost. The TechnicalServices Department expended tremendous efforts in the core sector and got our gradesproven in core sector industries. Customized oil was developed for steel mills. MAK Centerof Excellence Conducted 12 programs for the staff and channel partners and for the firsttime carried out MAK Tech Know League covering all lubes staff.

The Quality Assurance (QA) Department compiled an informativeLaboratory HSSE Manual. They also provided seamless support for conversion of BS IV to BSVI fuel (MS & HSD) in the National Capital Region (NCR) area resulting in the rollout of BS VI fuel within the stipulated time frame of 31st March 2018.

The OEM Team has obtained approval from a leading automotive companyfor automotive gear oil and engine oils.

NON-CONVENTIONAL ENERGY

To mitigate the climate change threats arising out of use ofconventional power and also to meet the nation's target of developing 175 GW powerfrom renewable energy sources BPCL is now constructing rooftop and ground mounted captivesolar plants in 5 installations / depots and 5 LPG plants. The total capacity of theseplants will be about 4 MW.

BPCL is also developing hybrid solar plants in 18 Company owned largeformat retail outlets across India. These plants are being developed as pilot projectswhere rooftop solar plants with battery storage will be incorporated. The detailedfeasibility and system design study has already been completed and construction of theseplants will commence soon.

Rooftop solar units were also installed in 216 retail outlets in FY2017-18 taking the number of total solarized retail outlets to 1217.

START UP INITIATIVE

BPCL has initiated ‘Project Ankur' to promote develop andnurture a ‘StartUp' ecosystem in India. BPCL has initially allocated Rs. 25Crores for this purpose and this fund is being distributed as grants to deservingapplicants. A process has been put in place whereby a six member Committee consisting ofthree internal and three external members decide on the recipients of the grant. In May2017 BPCL released a pan India advertisement asking for applications from Indiannationals. A website was created to receive these applications. BPCL has also signed aMemorandum of Understanding (MOU) for promotion and collaboration on Startups with KeralaStartup Mission Indian Institute of Technology Madras Invest India New Delhi KalingaInstitute of Technology Bhubaneswar and Axilor Venture Bangalore. These MoUs have kept ussupplied with a steady stream of applicants. During the course of the year BPCL hasselected 19 Startups for grant funding of approximately Rs. 20 Crores over a period of 3years. Some of the selected Startups are helping BPCL solve operational problems in areassuch as Refinery shutdowns inspections corrosion monitoring highway mapping efficientlighting. In addition to the grant funding BPCL is also providing mentoring and guidanceto selected startups. Going forward BPCL shall continue to support start-ups in a varietyof ways including grant funding exposure mentoring and guidance.

INDUSTRIAL RELATIONS

The Industrial Relations climate was cordial and harmonious across alllocations. BPCL continued its thrust towards maintaining industrial harmony with focus onincreased communication productivity enhancement and employee well-being. Allorganizational and employee related issues were handled with a collaborative approach andregular communication was established with all employees on all important issuesinfluencing them and the Organization. The Unions and workmen demonstrated theircommitment to achieve organizational objectives through constructive partnering in all theprocesses.

CORPORATE SOCIAL RESPONSIBILITY

In line with the vision of the Company BPCL strives to ‘energiselives' of the communities nationwide through various CSR initiatives. BPCL hascontributed towards the goal of achieving sustainable development and made significantprogress in the thrust areas of Education Water Conservation Skill Development Health& Hygiene and Community Development. The Company partners with several capableorganizations thereby supporting projects that benefit the underprivileged andmarginalised sections of society. CSR initiatives are undertaken based on socialenvironmental and economic considerations. While the Company continues to undertake newinitiatives BPCL has exited from those projects that have been completed successfully.

Sustaining BPCL's commitment to Education its flagship projectshave been replicated and scaled up where possible. Computer Assisted Learning (CAL)Project is one such project promoting education through digital literacy for students upto 10th Std. in low income schools of Mumbai and Jaipur. This year Project CALhas been replicated in 50 centres located in Municipal Corporation of Greater Mumbai(MCGM) school buildings and 20 schools in Washala a tribal village in Thane district. Theintervention focuses on improving children's learning levels in Mathematics andLanguage through the use of computers. More than 1 lakh children have been benefittedunder this initiative so far. Further valuing the importance of learning while readingBPCL has set up 24 libraries covering 3779 children in Zilla Parishad schools of UranTaluka District Raigarh in Maharashtra. These libraries are managed by ChildrenManagement Committees in the respective schools. In order to empower Mathematics teachersto facilitate conceptual learning in students a Mathematics Enhancement Project‘Ganit Shakti' was taken up in Government schools of Chhattisgarh. One ofBPCL's flagship programs for teacher and headmaster training "Saksham" hascompleted its fifth batch successfully. This set of primary/upper primary teachers andheadmasters from 64 low income/ Government schools of Mumbai were taken through a seriesof sessions on various topics both pedagogical and management-related. This projectencourages teachers to use new techniques for teaching classroom management as well asdeveloping new teaching materials according to the differential needs of the class. UnderSkill Development the Company focuses on placement/employment-linked skilling of womenunemployed youth and the disabled. One such high impact project was the skilling of 396leprosy affected youth in various trades like Motor Vehicle Mechanic Welder ComputerOperator Programming Assistant at centres at Nashik Champa Faizabad BankuraVadathorasalur and Vizianagaram. In a similar manner projects have been undertaken fortraining visually impaired youth in Acupressure and Massage Therapy in Laturrehabilitation and skilling of street youth in Mumbai and employment linked training to 30adolescents with autism / intellectual disability in Mumbai. Moreover in line with the‘Skill India Mission' of Government of India BPCL has taken the lead in settingup a state-of-the-art Skill Development Institute (SDI) in Kochi and also participated inand contributed towards other SDIs in Bhubaneshwar Visakhapatnam Raebareli and Guwahati.These SDIs have been set up to enhance their employability quotient for the Oil & GasIndustry as well as for other Industries requiring skills of a similar nature. BPCL hasnurtured Project BOOND - a water conservation project through rain water harvesting andcontinued with the same for almost a decade. The major achievement through this project isthat it has transformed villages from water scarce to water positive. BPCL has engagedwith communities by supporting formation of village level associations children'sclubs micro-finance groups or farmer federations therefore working towards ensuringsustainability. BPCL has successfully reached out both directly and indirectly to thecommunities in the villages through desilting of tanks supply channels and link channelsin the tank chain cascade strengthening of bunds check-dams village ponds repair/reconstruction of structures for water regulation setting up roof rain-water harvestingthereby increasing the availability of water. This project is in operation in the statesof Maharashtra Tamil Nadu Karnataka and Rajasthan and has covered 38 villages during theyear helping to increase agricultural yield floriculture and horticulture in thevillages thereby reducing migration.

The Company's Community Development projects are based onextensive need assessment and focuses on providing sustainable solutions that engage thecommunity that is benefitted. BPCL has been supporting the construction of Bio-Gas Plantsfor rural households promoting better life for womenfolk by providing a sustainable andnon-polluting fuel. Creating similar impact are projects like installation of Solar Streetlights in rural areas which not only serve to electrify rural villages but also improvesafety and convenience for the villagers. BPCL is conscious that Health and Developmentare inseparable and the overall economic growth of a community is dependent on its health.The Company has continued sustained efforts in improving access to quality primaryhealthcare services which also include projects that reach out to the cancer affectedprovide free surgeries and also strengthen the existing healthcare infrastructure acrossthe country. With an objective of reducing the burden of avoidable disability in ruralcommunities BPCL supported the world's first hospital on a train the ‘LifelineExpress' in providing over 9000 patients with both surgical and non-surgical medicalaid in addition to training healthcare providers. Alongside the targeted healthcareinterventions projects have been undertaken for providing clean drinking water tocommunities and nutrition to underprivileged children. BPCL has been relentlessly workingtowards making the Swachh Bharat programme a great success. The Company'scontribution in creating an ‘Open Defecation Free' country has been impressivethrough the construction and renovation of more than 1950 toilets in schools andcommunities till date. In an effort to make cities cleaner BPCL has supported an end toend Solid Waste Management project involving collecting segregating/processing andrecycling of waste at 33 micro-composting centres.

BPCL has also supported preservation of Indian heritage by adoption ofthe Sri Adi Sankaracharya Janmasthan- Kalady to make it a ‘Swachh Iconic Place'.The project includes the management and disposal of sewage/waste water development of acultural walkaway at Kalady town creating public sanitation facilities and provision ofclean drinking water.

BPCL was adjudged as the 12th Best Company in ResponsibleBusiness Rankings (First among PSUs and the oil industry). Another notable achievement forBPCL was receiving the prize for the ‘Best Swacch Iconic Place in India' fromthe Ministry of Drinking Water and Sanitation for supporting the ‘Madurai MeenakshiTemple project. The Annual Report on CSR activities in the specified format is provided inAnnexure B. The CSR Policy may be accessed on the Company's website at the linkhttps://www.bharatpetroleum.com/social-responsibility/corporate-social-responsibility/policy.aspx

PROMOTION OF SPORTS

The year 2017-18 was a good year for BPCL sportspersons as theycontinued to excel in the National as well as International sports arena. BPCL'srenowned Badminton player Saina Nehwal won the Bronze medal in the World BadmintonChampionship 2017 at Glasgow Silver Medal in the Indonesian Open Badminton Tournament andalso won the Senior National Badminton Championship 2017 held at Nagpur. UpcomingBadminton player Sameer Verma won the Swiss Open Badminton Tournament at St. JakobshalleSwitzerland in February 2018. Also Ruthvika Shivani Gadde won the Gold medal in the TataOpen India International Challenge Badminton Tournament held at Mumbai in December 2017.

Abhijeet Gupta an Arjuna Awardee won the Gold Medal in theCommonwealth Chess Championship held at New Delhi. BPCL's leading Chess player P.Harikrishna is ranked 25th in the World Chess rankings. He continues to be thesecond highest ranked Indian in the world after the legendary Vishwanathan Anand.

The Company's Snooker player Manan Chandra won his maiden GoldMedal in the World Team Snooker Championship held at Qatar in March 2018. BPCL's lonearcher Atanu Das has been performing commendably and represented the country in all themajor Archery events. BPCL'S Bridge player Marianne Karmarkar won the Silver Medalin the Bridge Federation of Asia and Middle East Championship and the Bronze Medal in theAsia Cup. Athlete Joby Mathew won two Gold medals three Silver medals and one Bronzemedal in the World Dwarf Olympic Games held at Canada in August 2017.

Four of BPCL's Hockey players namely Harmanpreet Singh S.V.Sunil Lalit Upadhyay and Varun Kumar were part of the Indian team which won the Goldmedal at the Asian Championship held at Dhaka in October 2017. Harmanpreet Singh S.V.Sunil Lalit Upadhyay Varun Kumar and Birendra Lakra won the Bronze medal by defeatingGermany 2-1 in World Hockey League held at Bhubaneshwar in December2017. In Kabaddiseven of the Company's players viz. Nilesh Shinde Kashiling Adake Rishank DevadigaNitin Madane Girish Ernak Rohit Rana and Vishal Mane were part of the successful KabaddiPremier League- Season

5. Rishank Devadiga Girish Ernak and Nitin Madane were part of theMaharashtra Kabaddi team which won the Senior National Championship held at Hyderabad inJanuary2018.

In Cricket Shreyas Iyer was selected in the Indian team for the testmatch against Australia. The new recruit Kuldeep Yadav represented the Indian Cricketteam in all formats of the game. Manish Pandey Shreyas Iyer Sanju Samson represented theIndian team for One Day and T-20 Internationals. The Volleyball team comprising TomJoseph Vibin George Kiran Philip Rohith P. Jithin K. Jerome Vinith Akhin G.S. AjithLal and A. Muthu Samy gave an excellent performance by winning all domestic tournamentsincluding the Petroleum Sports Promotion Board (PSPB) Championship. They won the All IndiaOpen Volleyball tournaments held at Meerut and Sultanpur. BPCL's young scholarshipplayers excelled at national and international events in the Junior as well as Opencategories. S. Shrikrishna is currently ranked at the no. 1 position in India in bothJunior Billiards and Junior Snooker categories. BPCL also bagged the Second Runners-up"President's Trophy" of PSPB during the year.

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

BPCL has been following in letter and spirit the PresidentialDirectives and other guidelines issued from time to time by the Ministry of Petroleum& Natural Gas Ministry of Social Justice and Empowerment and the Department of PublicEnterprises relating to reservations/ concessions for Scheduled Castes / Scheduled Tribes/ Other Backward Classes. An adequate monitoring mechanism has been put in place forsustained and effective compliance uniformly across the Corporation. Rosters aremaintained as per the Directives and are regularly inspected by the Liaison

Officer of the Corporation as well as the Liaison Officer of MOP&NGto ensure proper compliance of the Directives. SC/ST and economically backward studentsare encouraged by awarding scholarships to students pursuing courses at ITI &Secondary School education up to graduation level. BPCL also complies with provisionsunder "The Persons with Disabilities (Equal Opportunities Protection of Rights andFull Participation) Act 1995 relating to providing employment opportunities for Personswith Disabilities (PWDs). Details relating to representation/appointment of SC/ ST/OBCcandidates and Persons with Disabilities are enclosed as Annexure C.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Official Language Implementation Committees continued to functionat the Corporate Regional Refinery and location levels to take initiatives based on theannual program issued by the Ministry of Home Affairs besides implementing the provisionsof the Official Language Act and Rules. These Committees perform the task of reviewing theprogress made in Official Language Implementation on a quarterly basis. All committeeshave organized meetings as per the rules during this year. The First Sub-Committee of theParliamentary Committee on Official Language held inspection visits at six BPCLestablishments and the Joint Director of Ministry of Petroleum & Natural Gas heldinspection visits at ten BPCL establishments. "Hindi Fortnight" was celebratedduring 14th to 28th September 2017 across all Regions andRefineries. Various contests and cultural programs were organized during this period. Forencouraging Hindi language among employees' children 208 children who obtained 60%or more marks in Hindi in 10th and 12th standard were felicitatedwith Rajbhasha Awards. BPCL's Annual Report in-house journal ‘Petro Plus'and newsletter ‘Journeys' were issued in bilingual format. A majority of theadvertisements were also published in bilingual format. Hindi Coordinators' Seminarswere organized by all the Regions and Refineries for promotion of Hindi language.Representatives from the Ministry of Petroleum & Natural Gas also participated inthese seminars. "World Hindi Day" was organized on 10th January 2018across all the Regions and Refineries. During the year Hindi Training and Indic SoftwareUnicode training were conducted for the employees. BPCL's Co-ordination department atDelhi received a special award from Town Official Language Implementation Committee(TOLIC) Delhi for Best Implementation of Hindi language during the year. Bareilly LPGPlant Panipat Installation and Bijwasan Installation received Rajbhasha Awards from theirrespective TOLICs. Kochi Refinery received the Rolling Rajbhasha Trophy OverallChampion's Trophy and the Best House Journal Award from TOLIC Kochi. SouthernRegional Office received the first award from TOLIC Chennai and Chairman's Officereceived the second award from TOLIC Mumbai. Eastern Regional Office received the secondRajbhasha Trophy from Department of Official Language Ministry of Home Affairs.

CITIzEN'S CHARTER PUBLIC GRIEVANCE REDRESSAL (PG) & CUSTOMERCARE SYSTEM (CCS) RTI

Citizen's Charter

In pursuit of excellence BPCL is constantly upgrading the servicelevels offered across every customer interface. Various initiatives are driven by thecommitment and desire to enhance customer experience. The Citizen's Charter publishedon the BPCL website www.bharatpetroleum. in provides details of a range of servicesoffered to the customers with an overview of the marketing activities of the Corporationpolicy guidelines and processes on marketing of petroleum products. It covers the mandateof the Corporation customer rights with respect to standards quality time-frame forservice delivery the grievance redressal mechanism and other such topics. These servicelevels are revisited from time to time and updated in line with the changing businessenvironment/ customer's expectations. In the Corporate Website there is a separatesection on the Citizen's Charter under Important Links.

Public Grievance Redressal (PG)

During the year BPCL has received 4445 PG references all over Indiaand ensured all replies within the stipulated time as a part of compliance. This waspossible at BPCL as there is a well-established grievance redressal framework in eachStrategic Business Unit and the same is also being monitored from the Corporate Office. Itis an internet based Grievance Redressal Mechanism – centralized Public Grievance andMonitoring System of Government of India which helps BPCL in speedy redressal of publicgrievances.

Customer Care System (CCS)

BPCL also has a centralized Customer Care System (CCS) Portal namedSmartline where a customer can log complaints suggestions and feedback and timelyredressal of complaints is ensured. CCS is designed to track every interaction with anin-built escalation matrix. It is an interactive platform to customers through dedicatedtoll free numbers as well as web based access connect with BPCL. Regular feedback is takenfrom customers to meet their requirements and enhance service standards.

Right to Information (RTI)

The RTI Act 2005 was implemented on 12th October 2005 andsince then in this journey of effective RTI implementation of over 12 years BPCL hashandled 33500 RTI applications 4867 first appeals and 880 second appeals to CentralInformation Commission (CIC). In the beginning there was a single Central PublicInformation Officer (CPIO) handling all RTI related matters. With growing awareness thenumbers of RTI applications were increasing and to handle such a large number of RTIapplications BPCL has inducted 88 CPIOs and 12 Appellate Authorities spread across thelength and breadth of the country covering major SBUs like Retail LPG Aviation HRInternational Trade Mumbai Refinery and Kochi Refinery. This has been implemented with aview to serve the RTI applicants in an effective manner without any delay. BPCL is nowaligned to the RTI Online Portal of Department of Personnel and Training (DoPT) and alsocontinues to use its old in-house RTI package to attend to old RTI cases which have gonefor second appeal. All CPIOs and Appellate Authorities (AAs) along with their staff havebeen trained to independently handle the RTI Online Portal for addressing RTIapplications.

During the year 2017-18 BPCL had received 3874 RTI queries andreplied to them on time. The Company also organized 6 RTI Workshops/training programs forthe new and existing CPIOs/AAs and for deemed PIOs to stress the importance of RTI andequip them to handle RTI in true spirit. Regular interactions are carried out with theCPIOs by providing Guidelines Circulars Newsletters and case studies from CorporateOffice and on various CIC Decisions to keep them updated thus ensuring that there is nopenalty or stricture passed by CIC. In the Corporate Website BPCL has a separate sectionon RTI for better understanding of the public at large.

MICRO & SMALL ENTERPRISES

BPCL has been fully abiding by the Public Procurement Policy (PPP) forMSEs Order 2012 and more than 20% of the annual Goods and Service procurements are donethrough MSEs as against a target of 20%. All the high value tenders at BPCL are throughthe press tender route. The General Conditions of Contract (GCC) and General PurchaseConditions (GPC) of press tenders have the Purchase Preference Clause for MSEs. As per theexisting PPP for MSEs Order 2012 in any tender participating MSEs who are within aprice band of L1+15% will get a portion of the order provided they match the L1 price.This allocation to MSEs is at least 20%. Further 20% of this 20% portion i.e. 4% of thetotal tender quantity is reserved for SC/ST entrepreneurs in the MSE category. The PPP forMSEs Order 2012 also states that in the event of failure of such MSEs owned by SC/ST toparticipate in the tender process or meet the tender requirement and match the L1 price4% sub-target shall be met from other MSEs. BPCL organized 98 vendor meets/ workshopsacross India at Retail locations Regional Offices and Refineries to promote the PublicProcurement Policy for MSEs. BPCL teams participated in 13 Vendor Development Programmescum Exhibitions conducted by Micro Small and Medium Enterprises - Development Institute(MSME-DI) National Small Industries Corporation (NSIC) at Mumbai Navi Mumbai PuneChandigarh Panipat Bhubhaneshwar Ernakulum Trivandrum and other places. BPCLrepresentatives also put up a stall during the National Vendor Development Programme atBhubhaneshwar Kalady and Palakkad to showcase various products and Services to thevendors. A "Premier Vendor Workshop" was held during November 2017 wherein Dy.Director MSME-DI Mumbai made a detailed presentation of benefits of PPP for MSEs Order2012 to the vendors. A month long "Entrepreneurship Development Programme" wasconducted by Mumbai Refinery during April-May 2017 to encourage budding SC/STentrepreneurs to develop in their respective fields. The MSE procurement plan for 2017-18was put up in the BPCL website. It can be viewed at https://bharatpetroleum.com/Bharat-Petroleum-For/Business-Associates/Vendors.aspx. As per mandateof PPP for MSEs Order 2012 a nodal officer in BPCL is already appointed since the year2012 and the contact details and name is communicated regularly to the MSME Ministry. Forthe year 2017-18 the total procurement value for BPCL for Goods and Services excludingWorks Contracts where MSEs could have participated was

Rs. 7071.94 Crores and the actual procurement value from MSEs was Rs.1916.87 Crores i.e. an achievement of 27.11% as against the target of 20%.

The procurement for Goods and Services excluding Works Contracts fromMSE-SC/ST vendors during the year 2017-18 was Rs. 87.85 Crores i.e. an achievement of1.24% as against the sub- target of 4%. However in line with the PPP for MSEs Order 2012the sub-target was met from other MSEs. BPCL could not achieve the

4% sub-target from MSE-SC/ST since such vendors did not bid/ qualify inas many tenders as may have been required to achieve the desired procurement volumes.

VIGILANCE

As hitherto Vigilance has focused on and intensified proactive andpreventive efforts to promote good governance and ethical standards in all businessprocesses in the organization. Raising awareness has been quintessential and thereforethere has been a focus this year on regular interactions with employees and otherstakeholders. Vigilance sessions have been held for the new officer trainees to createawareness of various guidelines and standard operating procedures with a purpose ofinculcating good governance and an ethical mindset. Discussions and interactions have alsobeing carried out during visits to various Company office locations. These sessions havebeen taken as a platform to provide guidance and clarifications to officers on Companycirculars and guidelines vis--vis the guidelines issued by the Central VigilanceCommission (CVC) and the Ministry of Petroleum & Natural Gas. The essence has been toconvey the content and rationale for ensuring good governance. Vigilance has continued itsefforts towards preventive vigilance. Surprise inspections tender files scrutiny varioussystem studies Chief Technical Examiner (CTE) type inspections of procurement processesscrutiny of annual property returns filed by employees and other such activities havebeen carried out throughout the year. Complaints with specific reference to those havingvigilance overtones followed by investigations have been carried out diligently. TheVigilance function has closely interacted with the Businesses / Entities to ensure allfacets are covered while arriving at justified conclusions of cases. In matters referredby CVC and MOP&NG necessary investigations were carried out and recommendations weregiven within the prescribed time-frame. A summary of cases handled by Vigilance during theFinancial Year 2017-18 is given below. These complaints/ cases broadly cover issues likeSelection of Retail outlet Dealers/ LPG distributors irregularities committed by Retailoutlet Dealers / LPG distributors Tender / material – service procurement relatedissues allegation of misuse of official positions and similar issues.

Opening Received Total Disposed Closing
Balance during during Balance
(as on the Year the Year (as on
01.04.2017)

31.03.2018)

42 64 106 59 47

During the year Vigilance Officers were deputed for Training Programsfor enhancing their knowledge / skills in the work arena. These were focused programsconducted by various Institutions like the Central Bureau of Investigation TrainingAcademy LNJN National Institute of Criminology & Forensic Science TransparencyInternational India.

Vigilance Awareness Week an annual outreach program instituted byCentral Vigilance Commission for the staff of the organizations / departments and generalpublic to rededicate their commitments towards Honesty Probity and Ethical values everyyear. This week long observance coincides every year with the birth anniversary ofLohpurush Sardar Vallabh Bhai Patel on 31st October. Shri Vivek Sahai (IRTS)Former Chairman Railway Board and Principal Secretary to Government of India inauguratedVigilance Awareness Week on 30.10.2017 which was attended by Directors and other seniorfunctionaries.

The integrity Pledge was administered to 15500 employees on the firstday. Efforts were maximized to give wide coverage and enhance participation of the publicfor their commitment to the vision of ‘Corruption Free India' by taking theE-Integrity Pledge on the CVC Website by sending 4 Crore SMS messages in Hindi &English to more than 4 Crore customers vendors and business associates; playing themessage in Hindi & English at Customer Helpline and other IVRS systems providing theE-Integrity Pledge link on all our corporate websites; printing e-pledge message on allLPG refill invoices and organising several competitions at various Company offices andmany schools across the country. These included quizes slogans debates elocutioncrossword programs besides contests relating to real life incidents of fightingcorruption under the broad CVC Vigilance Awareness Week (VAW) 2017 theme ‘My Vision -Corruption Free India.' Activities under the "Integrity Clubs "in schoolsin Kochi Mumbai Delhi and Kolkata were intensified and the "Young Champions ofEthics" were rewarded for inculcating righteousness in society. This year the8th edition of Vigilance Plus was released and was well received by thestakeholders. This magazine contains articles on good governance ethics & valuesexperiences of individuals poems and highlights of the activities conducted during theyear as well as an overview of Vigilance Awareness Week 2017.

SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES

The Group consists of 5 Indian subsidiaries and 6 foreign subsidiariesas on 31st March 2018. Further the Company has 23 Joint Venture Companies andAssociate

Companies within the meaning of Section 2 (6) of the Companies Act 2013("the Act").

Details of Company that i) has become a Subsidiary during the financial year BPRL International Ventures BV
2017-18
Details of Company i) that has become a Joint Ratnagiri Refinery and Petrochemicals Ltd
Venture/ Associate during ii) the financial year 2017-18 Ujjwala Plus Foundation
Details of Company that Nil has ceased to be a Joint
Venture/ Associate during the financial year 2017-18

A separate statement containing the salient features of the financialstatements of Subsidiaries/ Associates/ Joint Venture Companies in Form AOC-1 pursuant toprovisions of Section 129 (3) of the Act is attached alongwith the financial statement.

The Corporation has placed its financial statements includingConsolidated Financial Statements and all other documents required to be attached theretoon its website www.bharatpetroleum.in as per Section 136(1) of the Act. Further theCompany has also placed separate Annual Reports/ audited accounts in respect of each ofits Subsidiaries on its above website. A copy of the said documents will be available forinspection and provided to any shareholder of the Company who asks for it. The policy fordetermining material Subsidiaries is posted on the Company's website at the link :https://www.bharatpetroleum.com/about-bpcl/our-policies.aspx

SUBSIDIARY COMPANIES

NUMALIGARH REFINERY LIMITED (NRL)

NRL was incorporated in 1993 with an authorized share capital of Rs.1000 Crores. It is a Category I Mini Ratna company and has a 3 MMTPA refinery atNumaligarh in Assam. Besides the refinery NRL has two marketing terminals one atNumaligarh & the other at Siliguri for evacuation of product. NRL also has a 10 TMTPALPG Bottling Plant at Numaligarh for which capacity was increased from 10 to 42 TMTPA in2017-18. As on 31st March 2018 the paid up capital of NRL was Rs. 735.63Crores of which BPCL holds 61.65%. During 2017-18 NRL Crude throughput was 2.81 MMT ascompared to 2.68 MMT in the previous year. NRL Revenue from Operations was Rs. 15923.19Crores for the financial year ending 31st March 2018 as compared to Rs.13946.92 Crores in the previous year. The company's consolidated profit after taxfor the year stood at Rs. 2041.95 Crores as against profit of Rs. 2049.83 Crores in theprevious year. The earnings per share (EPS) for the year 2017-18 was Rs. 27.76 ascompared to Rs. 27.86 in 2016-17. An interim dividend of Rs. 16 per share of facevalue Rs. 10 each has been paid and the Board of Directors of NRL have recommended adividend of Rs. 2.50 as final dividend which will result in total dividend declared of

Rs. 18.50 for the current financial year as compared to

Rs. 18.60 per share in the previous year. NRL had a net worth of

Rs. 4967.66 Crores as at 31st March 2018.

BHARAT PETRORESOURCES LIMITED (BPRL)

BPRL was incorporated in October 2006 as a 100% subsidiary of BharatPetroleum Corporation Limited to cater to the upstream activities of BPCL with anauthorized capital of Rs. 3000 Crores which has now been increased to Rs. 5000 Crores.As on 31.03.2018 BPCL's investment is Rs. 4448 Crores in equity. In addition tothis BPCL has given a loan of Rs. 1275 Crores to BPRL. BPRL has recorded consolidatedincome of Rs. 215.95 Crores and a consolidated loss of Rs. 68.72 Crores for the financialyear ending 31st March 2018.

BPRL has Participating Interests (PI) in 24 blocks in eight countriesalong with equity stake in two Russian entities holding the license to 4 producing assetsin Russia. Of the blocks twelve blocks are in India six in Brazil and one each in UAEMozambique Indonesia Israel Australia and Timor Leste. All the above blocks are invarious stages of exploration appraisal pre-development and production. BPRL and itsconsortia have a total of 26 discoveries in respect of blocks held in five countries i.e.Brazil Mozambique Indonesia Australia and India. BPRL's total acreage holding isaround 25359 sq km of which approximately 77% is offshore acreage. BPRL has wholly ownedsubsidiary companies located in the Netherlands Singapore and India. The subsidiarylocated in the Netherlands i.e. BPRL International BV in turn has four wholly ownedsubsidiary companies viz. BPRL Ventures BV BPRL Ventures Mozambique BV BPRL VenturesIndonesia BV and BPRL International Ventures BV. BPRL Ventures BV has 50% stake in IBVBrasil Petroleo Limitada which currently holds PI ranging from 20% to 40% in six blocksin offshore Brazil. BPRL Ventures Mozambique BV has PI of 10% in a block of Mozambique andBPRL Ventures Indonesia BV holds PI of 12.5% in a block in Indonesia. In the FinancialYear 2017-18 BPRL through BPRL International BV has formed a wholly owned subsidiarylocated in the Netherlands i.e.

BPRL International Ventures BV. BPRL International Ventures BV alongwith respective subsidiaries of consortium partners comprising ONGC Videsh Ltd. and IndianOil Corporation Ltd. (IOCL) formed a Special Purpose Vehicle (SPV) i.e. Falcon Oil &Gas BV in the Netherlands to hold 10% stake in the offshore producing concession in AbuDhabi namely Lower Zakum Concession. BPRL through BPRL International Ventures BV has 30%stake in Falcon Oil and Gas BV. The wholly owned subsidiary (WOS) of BPRL i.e. BPRLInternational Singapore Pte. Ltd. (BISPL) incorporated in Singapore along with WOSs ofOil India Ltd. (OIL) and IOCL formed two Joint Venture Companies as SPV i.e. Taas IndiaPte Ltd and Vankor India Pte Ltd. BISPL holds 33% stake in both the SPVs which holdstakes in Russian Companies. BPRL has a wholly owned subsidiary company BharatPetroResources JPDA Limited in India which holds PI in Block-JPDA06-103 in Timor Leste.The PI in respect of blocks in India and Australia are held directly by BPRL.

PETRONET CCK LIMITED (PCCKL)

PCCKL was originally floated as a Joint Venture Company of BPCL withPetronet India Limited with an authorised capital of Rs. 135 Crores and paid up sharecapital of Rs. 100 Crores. It became a subsidiary of BPCL in May 2015 and later in July2016 it became a wholly owned subsidiary of BPCL. The company owns and operates a 292 kmlong multi product Kochi-Karur pipeline from BPCL's installation of Irimpanam toKarur for transportation of MS HSD and SKO. The pumping volume during the year 2017-18was 2.65 MMT as against 2.78 MMT in the previous year. PCCKL registered a turnover of Rs.105.88 Crores and net profit of Rs. 56.95 Crores for the financial year ending 31stMarch 2018 as compared to a turnover of Rs. 109.78 Crores and net profit of Rs. 58.41Crores in the previous year. The EPS for the year stood at Rs. 5.70 as against Rs. 5.84 in2016-17. During the year PCCKL filed with Ministry of Corporate Affairs an applicationfor merger of PCCKL with BPCL. Ministry of Corporate Affairs has approved the same andPCCKL stands merged with BPCL with effect from 01.06.2018. The appointed date of merger is01.04.2018

BPCL-KIAL FUEL FARM PRIVATE LIMITED (BKFFPL)

BPCL has signed a Joint Venture Agreement with KIAL (KannurInternational Airport Ltd.) for implementation of a Fuel Farm at the newly developingKannur International Airport at Kannur on a 74:26 equity basis. The company has beenincorporated on 18.5.2015 and the authorized capital of the company is Rs. 18 Crores. Asof now BPCL has contributed Rs. 5.55 Crores to the BPCL-KIAL venture. The project isnearing completion and will be commissioned along with Kannur International Airport Ltd.

BHARAT GAS RESOURCES LIMITED (BGRL)

BGRL a wholy owned Subsidiary Company was incorporated on 7thJune 2018 primarily to undertake Gas related business activated with a view to capturethe upcoming oppourtinities and to evolve as a prominent player in the Natural Gas marketin future.

JOINT VENTURE COMPANIES AND ASSOCIATES BHARAT OMAN REFINERIES LIMITED(BORL)

Bharat Oman Refineries Ltd. (BORL) is a Joint Venture between BPCL andOman Oil Company S.A.O.C (OOC). As on 31st March 2018 it had authorized sharecapital of Rs. 7000 Crores and paid up equity share capital of

Rs. 1777.23 Crores with both BPCL and OOC holding equity stake of 50%each. BPCL has given a loan of

Rs. 1254.10 Crores and subscribed to Share Warrants of Rs. 1585.68Crores. Further the State of Madhya Pradesh has also subscribed to Rs. 26.90 Crores ofshare warrants in BORL. BPCL has also subscribed to Zero Percent Compulsorily ConvertibleDebentures of

Rs. 1000 Crores in March 2017.

BORL operates a refinery of 6 MMTPA capacity at Bina Madhya Pradesh.Infrastructure for a crude oil import/ supply system consists of a Single Point Mooring(SPM) System Crude Oil Terminal (COT) at Vadinar Gujarat and 935 km long cross countrycrude oil pipeline from Vadinar to Bina (VBPL). The Refinery commenced its commercialoperations in June 2011. BORL meets BPCL's product requirements in the northern andcentral regions of the country.

BORL has undertaken a debottlenecking project to increase its refiningcapacity from the existing 6 MMTPA to 7.8 MMTPA and to meet BS VI product qualityspecifications. The total cost of the project as approved by the BORL Board is Rs. 3072Crores. As on 31st March 2018 the project is approx. 90% complete. Postcommissioning in October 2018 BORL will produce 100% fuels confirming to BS VI standards.

During the year Bina refinery recorded a crude throughput of 6.75 MMTand an average capacity utilization of 112%. The company has reported Revenue fromOperations of Rs. 31287.48 Crores in the financial year ended as on 31st March2018 as compared to

Rs. 27059.03 Crores recorded in the previous financial year. The EPSfor the year stood at Rs. 2.96 as against

Rs. 3.49 in 2016-17. The net profit for the year 2017-18 stood at Rs.983.71 Crores as compared to Rs. 808.13 Crores in the previous year.

PETRONET LNG LIMITED (PLL)

PLL was formed in April 1998 for importing LNG and setting up an LNGterminal with facilities like jetty storage regasification etc. to supply natural gas tovarious industries in the country. The company has an authorised capital of Rs. 3000Crores and paid up capital of Rs. 1500 Crores. PLL was promoted by four public sectorcompanies viz. BPCL IOCL 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.BPCL's equity investment in PLL currently stands at Rs. 98.75 Crores. As at 31stMarch 2018 PLL had net worth of Rs. 9811.29 Crores. PLL recorded Revenue from Operationsof Rs. 30598.62 Crores in this financial year as compared to Rs. 24616.03 Croresrecorded in 2016-17. The net profit for the year stood at Rs. 2110.44 Crores as comparedto Rs. 1723.13 Crores in the previous year. The EPS for the year 2017-18 is Rs. 14.07 ascompared to Rs. 11.49 in 2016-17. PLL has recommended a dividend of Rs. 4.50 per share forthe financial year 2017-18 as against a dividend of Rs. 5 per share in theprevious year. The company allotted bonus shares in the ratio of 1:1 in July 2017.

INDRAPRASTHA GAS LIMITED (IGL)

IGL a Joint Venture Company with GAIL as the other co-promoter wasset up in December 1998 with an authorised capital of Rs. 220 Crores for implementing theproject for supply of Compressed Natural Gas (CNG) to the automobile sector and PipedNatural Gas (PNG) to households in Delhi. The paid up share capital of the company is Rs.140 Crores. BPCL invested Rs. 31.50 Crores in IGL for 22.5% stake in its equity. As on31.03.2018 IGL has 446 CNG stations and approx. 8.92 lakhs domestic PNG customers inDelhi and NCR. The company is also extending its business in the geographical areas ofRewari Karnal and Gurugram in Haryana. IGL holds 50% of equity in M/s. Central UP GasLimited Kanpur & M/s. Maharashtra Natural Gas Limited Pune Joint Venture Companiespromoted by BPCL and GAIL. IGL has registered Revenue from Operations of Rs. 5071.57Crores and a profit after tax of Rs. 721.72 Crores for the financial year ending 31stMarch 2018 as compared to a revenue of Rs. 4222.51 Crores and a profit after tax of Rs.606.34 Crores in the previous year. The EPS for the year stood at Rs. 10.31 as againstRs. 8.66 in 2016-17. During the year each equity share having face value of Rs. 10 wassub-divided into five equity shares of Rs. 2 each. IGL has recommended a final dividend ofRs. 2 (previous year interim dividend of Rs. 3.50 and final dividend of Rs. 5) on equityshares of

Rs. 2 (previous year Rs. 10) each for the year ending March 2018.IGL's net worth was Rs. 3646.95 Crores as at 31st March 2018.

SABARMATI GAS LIMITED (SGL)

SGL a Joint Venture Company promoted by BPCL and Gujarat StatePetroleum Corporation (GSPC) was incorporated on 6th June 2006 with anauthorized capital of Rs. 100 Crores for implementing the City Gas distribution projectfor supply of CNG to the household automobiles industrial and commercial sectors in thedistricts of Gandhinagar Mehsana Aravali Sabarkantha and Patan of Gujarat. The paid upshare capital of the company is

Rs. 20 Crores. As at 31.03.2018 BPCL has a stake of 49.94% in theequity capital of SGL. SGL has set up 70 CNG stations. SGL has achieved turnover of Rs.839.87 Crores and a net profit of Rs. 74.54 Crores for the financial year ending 31stMarch 2018 as against Rs. 687.49 Crores and Rs. 42.56 Crores respectively for theprevious year. The EPS for the year stood at Rs. 37.29 as against Rs. 21.27 in 2016-17.The company has recommended a dividend of

Rs. 2.50 per share for the financial year ending 31st March2018 as against Rs. 2 per share in the previous year.

CENTRAL UP GAS LIMITED (CUGL)

CUGL is a Joint Venture Company set up in March 2005 with GAIL as theother partner for implementing the project for supply of CNG to the household industrialand automobile sectors in Kanpur and Bareilly in Uttar Pradesh. The company wasincorporated with an authorised share capital of Rs. 60 Crores. The joint venture partnershave each invested Rs. 15 Crores for an equity stake of 25% each in the company thebalance 50% being held by IGL. CUGL has set up 25 CNG stations. CUGL has achieved Revenuefrom Operations of Rs. 268.79 Crores and net profit of Rs. 46.10 Crores for the financialyear ending 31st March 2018 as against Rs. 240.61 Crores and Rs. 48.49 Croresrespectively for the previous year. The EPS for the year stood at Rs. 7.64 as against Rs.8.06 in 2016-17.

MAHARASHTRA NATURAL GAS LIMITED (MNGL)

MNGL was set up in January 2006 as a Joint Venture Company with GAILfor implementing the project for supply of natural gas to the household industrial/commercial and automobile sectors in Pune and its nearby areas. The company wasincorporated with an authorised share capital of Rs. 100 Crores. The paid up capital ofthe company is Rs. 100 Crores. BPCL and GAIL have invested Rs. 22.50 Crores each inMNGL's equity capital. MIDC as a nominee of the Maharashtra Govt. has taken 5%equity in the month of June 2015. The balance 50% is held by IGL JVC. The company has setup 52 CNG stations so far. MNGL has achieved Revenue from Operations of Rs. 660.64 Croresand profit of Rs. 97.69 Crores for the financial year ending 31st March 2018 asagainst Rs. 535.83 Crores and profit of Rs. 76.56 Crores respectively in the previousyear. The EPS for the year stood at Rs. 9.77 as against Rs. 7.66 in 2016-17.

HARIDWAR NATURAL GAS PRIVATE LIMITED (HNGPL)

BPCL has signed a Joint Venture Agreement with GAIL Gas Limited forimplementation of a City Gas Distribution project in the geographical area of Haridwar andformed a Joint Venture Company HNGPL on a 50:50 basis. HNGPL was incorporated on 20thApril 2016. So far BPCL has paid Rs. 7.50 Crores as equity contribution.

GOA NATURAL GAS PRIVATE LIMITED (GNGPL)

BPCL has signed a Joint Venture Agreement with GAIL Gas Limited forimplementation of a City Gas Distribution project in North Goa and formed a Joint VentureCompany on a 50:50 basis. GNGPL was incorporated on 13.01.2017. The project cost for thefirst five years is Rs. 120 Crores which will be funded through 30% equity and 70% debt.So far BPCL has paid Rs. 7.50 Crores as equity contribution with equivalent contributionfrom GAIL Gas Limited.

BHARAT STARS SERVICES PRIVATE LIMITED (BSSPL)

BSSPL a Joint Venture Company promoted by BPCL and ST Airport PteLimited Singapore was incorporated in September 2007 for providing Into Plane Fuellingservices (ITP) at the new Bengaluru International Airport. The authorised and paid upshare capital of BSSPL is

Rs. 20 Crores. The two promoters have each subscribed to 50% of theequity share capital of BSSPL and BPCL's present investment stands at Rs. 10 Crores.The company commenced operations at the new international airport in Bengaluru from May2008 and has also incorporated a wholly owned subsidiary Bharat Stars Services Pvt.(Delhi) Ltd. for implementing ITP services exclusively at the new T3 Terminal of DelhiInternational Airport. BSSPL is presently providing ITP Services at three open accessairports viz. Bengaluru Mumbai & Delhi T3. It has also taken over the completeoperatorship of two BPCL Aviation Fuel Stations (AFS) at Jaipur and Durgapur. In additionBSSPL also provides ITP Services to BPCL at Calicut Chennai Vizag Ahmedabad Trivandrumand Delhi T1 Airports. BSSPL has achieved a turnover of

Rs. 40.93 Crores and profit of Rs. 5.35 Crores for the financial yearending 31st March 2018 as against Rs. 35.54 Crores and profit of Rs. 5.81Crores respectively for the previous year. The EPS for the year stood at Rs. 2.58 asagainst

Rs. 2.89 in 2016-17.

DELHI AVIATION FUEL FACILITY PRIVATE LIMITED (DAFFPL)

A Joint Venture Company DAFFPL has been promoted by BPCL IOCL andDelhi International Airport Limited (DIAL) for implementing open access Aviation Fuelfacility for the new T3 T2 and cargo terminal at Delhi International Airport. Theauthorized and paid up share capital of the company is Rs. 170 Crores and Rs. 164 Croresrespectively. BPCL and IOCL each have subscribed to 37% of the share capital of the jointventure while the balance 26% has been held by DIAL. DAFFPL has registered a Revenue fromOperations of Rs. 139.96 Crores and net profit of Rs. 48.96 Crores for the financial yearending 31st March 2018 as against revenue of Rs. 117.09 Crores and net profitof

Rs. 38.34 Crores respectively during the previous year. The EPS for theyear stood at Rs. 2.99 as against Rs. 2.34 in 2016-17. The company has paid an interimdividend of

Rs. 1.50 per equity share and recommended final dividend of Rs. 0.50per share for the financial year ending 31st March 2018 as against Rs. 2 pershare paid for the previous year.

MUMBAI AVIATION FUEL FARM FACILITY PRIVATE LIMITED (MAFFFPL)

MAFFFPL has been incorporated on 26th February 2010 underthe provisions of the Companies Act 1956 in Maharashtra to implement and manage fuel farmfacilities at Chhatrapati Shivaji International Airport (CSIA) Mumbai including ITPservices. It is a Joint Venture Company of Mumbai International Airport Private Ltd.(MIAL) HPCL BPCL and IOCL each holding 25% stake in the company. Presently BPCL hasinvested an amount of Rs. 41.89 Crores towards equity. The company has started itsoperations from 1st February 2015. MAFFFPL has registered a Revenue fromOperations of Rs. 132.09 Crores and net profit of Rs. 47.22 Crores for the year ending31.03.2018 as against revenue of Rs. 119.49 Crores and net profit of Rs. 26.58 Croresduring the previous year. The EPS for the year stood at Rs. 2.97 as against Rs. 1.74 in2016-17. MAFFFPL has paid a maiden dividend of Rs. 1/- per share during the year.

KANNUR INTERNATIONAL AIRPORT LIMITED (KIAL)

The Government of Kerala has promoted Kannur International AirportLimited (KIAL) as a public limited company to establish and operate airports and alliedinfrastructure facilities at Kannur and/or other parts of India. KIAL would initially setup an Airport at Kannur in the state of Kerala at an estimated project cost of

Rs. 2418 Crores of which Rs. 1500 Crores will be financed throughequity and the balance sum of Rs. 918 Crores will be financed by way of borrowings. Thepaid up share capital of the company as at 31.03.2018 is Rs. 1059.70 Crores out of whichBPCL has made a contribution of

Rs. 216.80 Crores. As on 31st March 2018 the overallphysical progress of the airport is close to 96% from the operational perspective andcommencement of the Airport is planned in September 2018.

MATRIX BHARAT PTE LIMITED (MXB)

MXB is a Joint Venture Company incorporated in Singapore on 20thMay 2008 for carrying out the bunkering business and supply of marine lubricants in theSingapore market as well as international bunkering including expanding into Asian andMiddle East markets. The company has been promoted by BPCL and Matrix Marine Fuels L.P.USA an affiliate of the Mabanaft group of companies Hamburg Germany. The authorisedcapital of the company is USD 4 million. The company has subscribed 20 lakh shares for anequivalent sum of Rs. 8.41 Crores. Both the partners have contributed equally to the sharecapital. Matrix Marine Fuels L. P. USA has subsequently transferred their share andinterest in the joint venture in favour of Matrix Marine Fuels Pte Limited Singaporeanother affiliate of the Mabanaft group. MXB has achieved revenue of USD 220.24 millionand earned a profit of USD 1.88 million for the year ending 31.12.2017 as against USD263.31 million revenue and a profit of USD 2.71 million in the year 2016.

KOCHI SALEM PIPELINE PRIVATE LIMITED (KSPPL)

BPCL has signed a Joint Venture Agreement with IOCL for implementationof the Kochi-Coimbatore-Salem LPG Pipeline project and formed a Joint Venture CompanyKSPPL in January 2015 on a 50:50 basis. BPCL has paid an amount of Rs. 75 Crores towardsequity in this JV. The project is presently underway.

GSPL INDIA TRANSCO LIMITED (GITL)

BPCL has signed a Joint Venture Agreement on 30th April 2012with Gujarat State Petronet Ltd IOCL and HPCL for laying a 1747 kmMallavaram-Bhopal-Bhilwara-Vijaipur (MBBVPL) Gas Pipeline. BPCL's equity contributionto this project will be 11% of the total equity capital. The other JV partners willcontribute GSPL 52% IOCL 26% and HPCL 11%. BPCL has made an initial contribution of

Rs. 37.40 Crores so far. The company is in the process of acquiring theRight of Way for the pipeline and land for the SV/ RT/ DT stations.

GSPL INDIA GASNET LIMITED (GIGL)

BPCL has signed a Joint Venture Agreement on 30th April 2012with Gujarat State Petronet Ltd IOCL and HPCL for laying of a Gas Pipeline toMehsana-Bhatinda (MBPL) (Pipeline length 1654 km) and Bhatinda-Jammu-Srinagar (BJSPL)(Pipeline length 460 kms). BPCL's equity contribution to this project will be 11% ofthe total equity capital. The other JV partners will contribute GSPL 52% IOCL 26% and HPC11%. BPCL has made an equity contribution of Rs. 42.57 Crores so far. The company is inthe process of acquiring the Right of Way for the Pipelines and land for SV/ RT/ DTstations.

FINO PAYTECH LIMITED (FINO)

BPCL signed a Subscription Agreement with FINO PayTech Ltd. andShareholders Agreement with FINO and other Investors on 29.07.2016. Pursuant to the saidagreements BPCL had made an investment of

Rs. 251 Crores for a 21.1% stake in FINO PayTech Limited. The final RBILicense for FINO Payments Bank (FPB) was received on 30.03.2017. FPB has commenced itsbanking operations with effect from 30.06.2017 and has operationalized 422 branches acrossIndia during the year ending 31.03.2018. Revenue from Operations during the year stood atRs. 360 Crores and consolidated loss for the year 2017-18 was Rs. 167.21 Crores.

PETRONET INDIA LIMITED (PIL)

BPCL has 16% equity participation with an investment of Rs. 16 Croresin PIL which was formed as a financial holding company to give impetus to the developmentof a pipeline network throughout the country. PIL has promoted Joint Venture Companies forpipelines viz. Vadinar-Kandla Kochi-Coimbatore-Karur and Mangalore - Hassan- Bangalore.PIL earned other income of Rs. 2.90 Crores and a net profit of Rs. 2.07 Crores for thefinancial year ending 31st March 2018 as against other income of

Rs. 6.21 Crores exceptional items of Rs. 61.47 Crores and a net profitof Rs. 59.32 Crores during the previous year. The entire stake of PIL in the Joint VentureCompanies has been purchased by respective promoter companies viz. PCCKL stake has beentaken over by BPCL PMHB stake has been taken over by HPCL and ONGC and PVKL stake hasbeen taken over by IOCL and RIL. During the year the paid up share capital was reducedfrom Rs. 100 Crores to

Rs. 1 Crore and Rs. 99 Crores was returned to its promoters. Now thecompany would be wound up following the normal legal process.

BHARAT RENEWABLE ENERGY LIMITED (BREL)

BREL was incorporated on 17th June 2008 for undertaking theproduction procurement cultivation and plantation of horticulture crops such as KaranjJathropha and Pongamia trading research and development and management of all the cropsand the plantation including Biofuels in the State of Uttar Pradesh with an authorizedcapital of Rs. 30 Crores. The company has been promoted by BPCL with Nandan CleantechLimited (Nandan Biomatrix Limited) Hyderabad and Shapoorji Pallonji group through theiraffiliate S.P. Agri Management Services Pvt. Ltd. A Company Petition was filed before theHon'ble High Court of Allahabad (Lucknow Bench) for winding up BREL. By the judgementdated 21.12.2015 the company was ordered to be wound up and an Official Liquidator toproceed in accordance with the provisions of the Companies Act. All assets and records ofthe company have been deposited with the Official Liquidator.

RATNAGIRI REFINERY & PETROCHEMICALS LIMITED (RRPL)

RRPL was incorporated on 22nd September 2017 as a JointVenture Company between BPCL IOCL and HPCL with an authorised capital of Rs. 400 Croresand paid up capital of

Rs. 100 Crores. BPCL has made an initial equity contribution of Rs. 25Crores. An MOU was signed in April 2018 with Saudi Aramco who has shown interest inpartnership. Further in June 2018 an MOU was signed between Saudi Aramco and ADNOC toco-invest in the project as overseas investors. Process of acquisition of land throughMIDC has begun. Pre-project activities have commenced.

UJJWALA PLUS FOUNDATION (UPF)

A Joint Venture Company was formed for charitable purposes among threePSU Oil Marketing Companies viz. BPCL HPCL & IOCL (in the ratio of 25:25:50) underSection 8 of the Companies Act 2013 on a non-profit basis. Incorporated on 21stJuly 2017 the company will be limited by guarantee and not having any share capital. Thenon-profit company will receive funds/contributions from organizations or individuals andthese will be utilized for release of LPG connections to Below Poverty Level (BPL)households not covered under Pradhan Mantri Ujjwala Yojana. The beneficiaries areidentified from the Socio – Economic Caste Census (SECC) 2011 based on certaindeprivation criteria.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report for the year underreview as stipulated under Regulation 34(e) of SEBI (Listing Obligations and DisclosuresRequirement) Regulations 2015 is presented in a separate section forming part of theAnnual Report.

The forward looking statements made in the Management Discussions andAnalysis Report are based on certain assumptions and expectations of future events. TheDirectors cannot guarantee that these assumptions are accurate or these expectations willmaterialise.

CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGICALABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

MEMORANDUM OF UNDERSTANDING WITH MINISTRY OF PETROLEUM & NATURALGAS

BPCL for the 29th successive year has entered into aMemorandum of Understanding (MOU) for the year 2018-19 with the Ministry of Petroleum& Natural Gas. BPCL has been achieving an "Excellent" performance ratingsince 1990-91. In 2016-17 BPCL has achieved an "Excellent" rating with acomposite score of 90.14%.

BOARD EVALUATION

The provisions of Section 134 (3)(p) of the Act shall not apply to aGovernment Company in case the Directors are evaluated by the Ministry which isadministratively in charge of the Company as per its own evaluation methodology. BPCLbeing a Government Company the performance evaluation of the Directors is carried out bythe Administrative Ministry (MoP&NG) Government of India as per applicableGovernment guidelines.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The provisions of Section 134 (3)(e) of the Act are not applicable to aGovernment Company. Consequently details on Company's policy on Directors'appointment and other matters are not provided under Section 178 (3) of the Act.

Similarly Section 197 of the Act shall not apply to a GovernmentCompany. Consequently disclosure of the ratio of the remuneration of each Director to themedian employee's remuneration and other such details including the statement showingthe names and other particulars of every employee of the Company who if employedthroughout / part of the financial year was in receipt of remuneration in excess of thelimits set out in the Rules are not provided in terms of Section 197 (12) of the Act readwith Rule 5 (1) / (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The Chairman & Managing Director and the Whole-time Directorsof the Company did not receive any remuneration or commission from any of itsSubsidiaries. BPCL being a Government Company its Directors are appointed / nominated bythe Government of India as per the Government / DPE Guidelines which also includefixation of pay criteria for determining qualifications and other matters.

CORPORATE GOVERNANCE

The Report on Corporate Governance together with the Auditors'Certificate on compliance of Corporate Governance is annexed as Annexure D as requiredunder Listing Regulations and Department of Public Enterprises

Guidelines of Corporate Governance for Central Public SectorEnterprises.

SOCIAL ENVIRONMENTAL AND ECONOMIC RESPONSIBILITIES AND BUSINESSRESPONSIBILITY REPORT

The Corporation is committed to be a responsible Corporate Citizen insociety which leads to sustainable growth and economic development for the nation as wellas all stakeholders. In order to be a responsible business to meet its commitment theBoard of Directors of the Company has adopted and delegated to the SustainabilityCommittee the implementation of a Business Responsibility Policy based on the principlesof National Voluntary Guidelines on Social Environmental and Economic Responsibilities ofBusiness as issued by the Ministry of Corporate Affairs Government of India. BPCL'sSustainability Report is in accordance with the Global Reporting Initiative (GRI).

As stipulated under the Listing Regulations the BusinessResponsibility Report describing the initiatives taken by the Company from theenvironmental social and governance perspective is attached as part of the Annual Report

TRANSACTIONS WITH RELATED PARTIES

During the financial year the Corporation has entered into contractsor arrangements with related parties which were in the ordinary course of business and onan arm's length basis. These transactions are not falling under the provisions ofSection 188(1) of the Act.

Information on transactions with related parties are provided inAnnexure F in Form AOC-2 in accordance with Section 134(3) of the Act and Rule 8(2) of theCompanies (Accounts) Rules 2014.

In terms of Listing Regulations and Policy of the Corporation onmateriality of related party transactions a transaction entered into with Bharat OmanRefineries Limited a Joint Venture Company could be considered material. This transactionis being placed for approval of the shareholders.

The Policy on materiality of related party transactions and dealingwith related party transactions are available on the Corporation's website at thelink. https://www.bharatpetroleum.com/about-bpcl/our-policies.aspx

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Corporation has provided Loans/Guarantees to its Subsidiaries/JointVentures and has made Investments in compliance with the provisions of the Companies Act2013. The details of such investments made and loans/ guarantees provided as at 31stMarch 2018 are given in the notes to the standalone financial statements and in theDisclosures under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 in Annexure H.

RISK MANAGEMENT

The Risk Management Committee of the Board has defined roles andresponsibilities which includes reviewing and recommending of the risk management planand reviewing and recommending the risk management report for approval of the Board withthe recommendation of the Audit Committee. The Audit Committee evaluates internalfinancial controls and risk management systems. The Corporation has adopted a RiskManagement Charter and Policy for self-regulatory processes and procedures for ensuringthe conduct of the business in a risk conscious manner.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) / (5) of the Companies Act 2013 theDirectors of the Company confirm that: a. In the preparation of the Annual Accounts forthe year ended 31st March 2018 the applicable Accounting Standards have beenfollowed along with proper explanation relating to material departures; b. The Directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit andloss of the Company for that period; c. The Directors have taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; d. The Directors have prepared the annual accounts on a‘going concern' basis; e. The Directors have laid down internal financialcontrols to be followed by the Company and such internal financial controls are adequateand are operating effectively; and f. The Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and such systems are adequate andoperating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Vinay Sheel Oberoi and Smt. J. M. Shanti Sundharam were appointedas Additional Directors with effect from 21.9.2017. Further Dr. (Smt.) TamilisaiSoundararajan was appointed as Additional Director with effect from 28.9.2017. As theyhave been appointed as Additional Directors they will hold office till the ensuing AnnualGeneral Meeting (AGM). Notices under Section 160 of the Act have been received proposingtheir names for appointment as Directors at the ensuing AGM.

Shri Rajiv Bansal Additional Secretary & Financial AdvisorMinistry of Petroleum & Natural Gas was appointed as Additional Director from28.11.2017. As he has been appointed as Additional Director he will hold office till theensuing AGM. Notice under Section 160 of the Act has been received proposing his name forappointment as Director at the ensuing AGM. Shri K. Padmakar was appointed as AdditionalDirector and as Director (Human Resources) with effect from 1.2.2018. As he has beenappointed as Additional Director he will hold office till the ensuing AGM. Notice underSection 160 of the Act has been received proposing his name for appointment as Director atthe ensuing AGM.

Dr. K. Ellangovan Principal Secretary (Industries & IT) Govt. ofKerala was appointed as Additional Director from 20.3.2018. As he has been appointed asAdditional Director he will hold office till the ensuing AGM. Notice under Section 160 ofthe Act has been received proposing his name for appointment as Director at the ensuingAGM. Shri K. Sivakumar was appointed as Additional Director on the Board and as Director(Finance) with effect from 1.5.2017. The Shareholders have appointed him as Director(Finance) of the Company at the AGM held on 12.9.2017. He relinquished from the post ofDirector with effect from 8.5.2018 and took over as ED (Finance) I/c. He was appointed asCFO effective 29.5.2018 by the Board till the position of Director (Finance) is filled in.

Shri P. H. Kurian Government Nominee Director relinquished the officeof Director on 18.4.2017. Shri P. Balasubramanian Director (Finance) superannuated at theclose of office hours on 30.4.2017. Shri Anant Kumar Singh Government Nominee Directorceased to be a Director on the Board from 28.11.2017. Shri S. P. Gathoo Director (HumanResources) superannuated at the close of office hours on 31.10.2017. Shri Paul AntonyAdditional Chief Secretary (Industries

& Power) Government of Kerala was appointed as AdditionalDirector on the Board and Government Nominee Director with effect from 19.4.2017. TheShareholders have appointed him as Director of the Company at the AGM held on 12.9.2017.He relinquished the office of Director on 20.3.2018.

The Directors have placed on record their deep appreciation on behalfof the Board for the valuable contributions made and guidance given by them for thedevelopment and progress of the Company's business. Shri R. Ramachandran Director(Refineries) will retire by rotation at the ensuing AGM as per the provisions of Section152 of the Act and being eligible has offered himself for re-appointment as Director atthe said Meeting. As required under the Corporate Governance Clause brief bio-data of theabove Directors who are appointed/ reappointed at the AGM are provided in the AGM Notice.

DECLARATION OF INDEPENDENCE

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

FAMAILIARISATION PROGRAMMES

The Company has adopted a policy for the training requirements of BoardMembers. The details thereof with the programmes sponsored for familiarisation ofIndependent Directors with the Company are available at the Company's web link:https://www.bharatpetroleum. com/about-bpcl/our-policies.aspx

AUDIT COMMITTEE

The details of the composition of the Audit Committee terms ofreference meetings held etc. are provided in the Corporate Governance Report which formspart of this Report.

VIGIL MECHANISM

There exists a vigil mechanism to report genuine concerns in theOrganisation. The Corporation has implemented the Whistle Blower Policy to ensure greatertransparency in all aspects of the Corporation's functioning. The objective of thepolicy is to build and strengthen a culture of transparency and to provide employees witha framework for responsible and secure reporting of improper activities.

The vigil mechanism provides for adequate safeguards againstvictimisation of persons who use a mechanism and has provision for direct access to theChairperson of the Audit Committee in appropriate or exceptional cases. The details ofestablishment of such a mechanism are disclosed in the Company's web link:https://www.bharatpetroleum.com/about-bpcl/our-policies.aspx

NUMBER OF MEETINGS OF THE BOARD

Fifteen meetings of the Board of Directors were held during the yearthe details of which are given in the Corporate Governance Report that forms part of thisReport. The intervening gap between the meetings was within the period prescribed underthe Companies Act 2013 and the Listing Regulations.

EXTRACT OF ANNUAL RETURN

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

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIALSTATEMENTS

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

STATUTORY AUDITORS

M/s CVK & Associates Chartered Accountants Mumbai and M/s. Borkar& Muzumdar Chartered Accountants Mumbai were appointed as Statutory Auditors for theyear 2017-18 by the Comptroller & Auditor General of India (C&AG) under theprovisions of Section 139 (5) of the Companies Act 2013. They will hold office tillconclusion of the ensuing AGM. The Auditors' Report does not contain anyqualification reservation or adverse remark. The said firms have been reappointed as theStatutory Auditors for the financial year 2018-19 by the C&AG.

COST RECORD AND COST AUDIT

The Corporation has prepared and maintained cost records as prescribedunder section 148(1) of the Companies Act 2013 for the Financial Year 2017-18. TheCost Audit Report for the year 2016-17 has been filed with the Ministry of CorporateAffairs on 05.10.2017 in XBRL Format. The due date for filing the Cost Audit Report was11.10.2017. The Cost Auditors for financial year 2016-17 were M/s ABK & AssociatesMumbai and M/s Bandyopadhyaya Bhaumik & Company Mumbai.

The same Cost Auditors have been appointed for the year 2017-18. TheCost Auditor shall within a period of 180 days from the closure of the financial yearforward the Cost Audit Report and the Corporation is required to file the Cost AuditReport within 30 days of receipt of the same.

SECRETARIAL AUDITOR

The Board has appointed M/s Dholakia & Associates LLP CompanySecretaries to conduct a Secretarial Audit for the financial year 2017-18. The SecretarialAudit Report for the financial year ended 31st March 2018 is annexed herewithin Annexure I to this Report.

The Secretarial Audit Report does contain an observation that a. TheCompany did not have sufficient number of Independent Directors on its Board as requiredunder Regulation 17(1)(b) of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 (SEBI LODR) for the period from 1.4.2017 to 27.9.2017. b. The Companydid not have a Woman Director on its Board pursuant to second proviso of Section 149(i) ofthe Companies Act 2013 read with Companies (Appointment and Qualification of Directors)Rules 2014 and under Regulation 17 of SEBI (LODR) for the period from 1.4.2017 to20.9.2017. Explanations by the Board to the above observation in the Secretarial AuditorReport: "Bharat Petroleum Corporation Ltd is a Government Company under theAdministrative Control of Ministry of Petroleum and Natural Gas. Thenomination/appointment of all categories of Directors are done by Government of India inaccordance with the laid down guidelines of Department of Public Enterprises. Accordinglythe subject matter of nomination/appointment of adequate number of Independent Directorsincluding Woman Director falls under the purview of the Government of India. We have fromtime to time communicated to the Ministry of Petroleum & Natural Gas with respect tothe requirements of Independent Directors. After receipt of communication from Governmentof India BPCL has appointed three Independent Directors including two woman IndependentDirectors i.e. 2 Independent Directors on 21.9.2017 and one Independent Director on28.9.2017. Pursuant to these appointments BPCL has complied with the requirements underthe Companies Act 2013 SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 and DPE guidelines."

GENERAL

There were no significant or material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status and Company's operations infuture.

The Company has not issued equity shares with differential rights /sweat equity shares/ Employee Stock Options.

BPCL has complied with the provisions relating to the constitution ofInternal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. Accordingly Internal ComplaintCommittees have been constituted across the Corporation in all Regional Offices andRefineries. A Committee at the Corporate Level also overseas the functioning of theseCommittees.

During the year under review there was one complaint of sexualharassment in respect of our employee. The matter was taken up by the ICC and an enquirywas conducted by them. The report of ICC in the matter is awaited.

ACKNOWLEDGEMENTS

The Directors commend the indefatigable efforts of the employees whichhas contributed immensely to the outstanding performance of the Company this year. Theirdedication and commitment will stand the organisation in good stead to meet the challengesof the disruptive environment in future.

BPCL has also enjoyed unstinting support and guidance from all theMinistries of the Government of India particularly the Ministry of Petroleum &Natural Gas. All the stakeholders especially the customers business partners andshareowners have extended tremendous support always underpinning the success of theOrganisation.

The Directors assure of their unwavering focus on the strategic plansof the Company to steer it responsibly to stellar heights.

For and on behalf of the Board of Directors

Sd/-

D. Rajkumar

Chairman & Managing Director

Place: Mumbai

Date: 08.08.2018