Untitled - Bharat Petroleum

the year was lower at Rs.10,613.71 million, as against
Rs.12,819.55 million last year. BPC contributed Rs. 203.92
billion to the exchequer by way of taxes and duties
vis-à-vis Rs. 152.19 billion during the last financial year.
Borrowings from the banks increased to Rs.63,095.58
million from Rs.30,804.13 million at the close of the
previous year. Additional, the Corporation had
Collateralised Borrowing and Lending Obligation (CBLO)
through Clearing Corporation of India Ltd. amounting to
Rs.8,650.00 million. Public deposits as at March 31, 2006
stood at Rs.970.34 million as compared to Rs.2,231.35
million at the end of the previous year. The amount of
deposits, matured but unclaimed, at the end of the year
was Rs.11.34 million, which pertains to 101 depositors.
The total Capital Expenditure during the year 2005-06
amounted to Rs. 20,190.84 million.
The comments of the Comptroller and Auditor General of
India (C&AG) on the Accounts, along with the explanations
of the Board of Directors, are annexed as Annexure D.
REFINERIES
Mumbai Refinery
During the year 2005-06, Mumbai Refinery processed
10.30 MMT of crude as against 9.14 MMT during 2004-05,
thereby achieving its highest level of crude processing in
a financial year. However, the gross margin for the current
year stood at USD 1.64 per barrel, as against the gross
margin of USD 4.56 per barrel in 2004-05. This translated
into an overall gross margin of Rs.5,606.35 million as
compared to Rs.14,064.09 million in the previous year.
The sharp reduction in the gross margin can be attributed
to the sharing of subsidy burden for LPG, SKO, MS and
HSD, reduction in duty protection rates, additional octroi
payment at Mumbai and unfavorable spread between
crude and product prices, especially for Naphtha and Fuel
Oil. With the commissioning of the Hydrocracker unit and
LOBS plant at the Mumbai Refinery, the gross margin is
expected to improve in the coming years.
Kochi Refinery
During the year 2005-06, Kochi Refinery processed
6.94 MMT crude as compared to 7.92 MMT during the
previous year. The gross margin per tonne of crude
processed, which stood at USD 5.9 per barrel in 2004-05,
went down to USD 3.2 per barrel during 2005-06.
The details of the performance of the Refineries,
activities and future plans are discussed in the
Management Discussion and Analysis Report (MD&A).
MERGER OF KRL WITH BPC
Pursuant to the provisions of Section 391 to 394 of the
Companies Act, 1956, and with the approval of the Board of
Directors, the proposal for merger of Kochi Refineries
Limited (KRL) with BPC was approved by the shareholders
of BPC and KRL with a swap ratio of 4 fully paid up equity
shares of Rs.10/- each of BPC for every 9 fully paid up
equity shares of KRL. The Ministry of Company Affairs,
New Delhi accorded their sanction to the Scheme of
Amalgamation vide Order dated 18 th August 2006.
Allotment / Issue of BPC shares in the approved Swap
Ratio to KRL Shareholders, who were eligible for such
shares as on the record date of 29 th September 2006, has
been completed and the said Shareholders have become
Shareowners of BPC.
MARKETING
During the year 2005-06, BPC’s overall marketing sales
stood at 21.63 MMT. While there was no significant change
in the sales volume as compared to the previous year,
BPC’s market share amongst Public Sector Oil Companies
increased to 23.1% as on 31 st March 2006, as compared to
22.6% at the end of the previous year. The year witnessed
a sharp reduction in the sales volumes of HSD, both for the
Industry as well as for BPC. This was offset by a
significant increase in the sales of ATF, FO and Naphtha as
compared to the previous year. BPC also exported
0.80 MMT of Naphtha, 0.33 MMT of FO and 0.24 MMT of
HSD during the year. A detailed discussion of marketing
performance is covered in MD&A.
PROJECTS
Central India Refinery Project
Bharat Oman Refineries Ltd. (BORL), a Joint Venture
Company formed by BPC along with Oman Oil
Company Ltd. (OOCL), is in the process of setting up a
6 MMTPA capacity grassroot Refinery at Bina, in Madhya
Pradesh with Crude Oil / Supply System consisting of a
Single Point Mooring system (SPM) and Crude Oil Storage
Terminal (COT) at Vadinar and a 935 km long crosscountry
crude oil pipeline from Vadinar to Bina. The
approved revised cost of the Refinery project is Rs.103.78
billion and so far, BPC and OOCL have each contributed
Rs. 755 million towards the equity of the Company.
Environmental clearances, which had delayed the
implementation of this project, have since been received.
In view of the decision by OOCL to limit its equity
contribution in BORL to the present level of Rs.755 million,
BPC has, with the approval of the Government of India,
decided to enhance its equity contribution in BORL upto
50%, amounting to Rs. 19,960 million. As at 31 st March, 2006,
BORL has net worth of Rs. 1500.15 million with a book
value of Rs. 9.93 per share.
A new configuration study has been completed, wherein
the configuration based on use of the integrated Full
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