Sem 1 Comm Project

Ramnarain Ruia Autonomous College, Matunga, Mumbai 400019
Class: FYBA Sem:1 Commerce Assignment

(Paper Code RUACOM101 Paper title Introduction to Business Organisation) 2020-21
Name/s of the student: Dattaprasad S Ambre Roll No. ______
Commerce Assignment for Year: 2020-21
Class: FYBA
Semester: I
Paper code: RUACOM101
Paper title: Introduction to business Organisation
Topic of Assignment: Bharat petroleum Corporation Limited
Name of the student: Dattaprasad S Ambre
Roll No:
Date: 09 October 2020

1
INDEX
S. No. Particulars Page no.
1 Form of Organisation 3
2 Formation 4
3 Background 5
4 Registration 8
5 Organisational structure 8
6 Number and types of securities and annual Report 12
7 Auditors Report 17
8 Meetings 19
9 Tax rates 21
10 New Regulations and Amendments 21
11 current market dynamics 22
12 Bibliography 22
2
Logo
Bharat petroleum Corporation Limited
▪ FORM OF ORGANISATION
• Type: Public Sector Undertaking

• Sector: Energy Minerals
• Industry: Oil and Gas
• Owner: Government of India (52.98%) with the rest owned by Foreign
Portfolio Investors (17%), BPCL trust for investing in shares (9%), Mutual funds
and UTI (7.5%), Insurance companies (6%) and the balance held by individual
shareholders.
• Its MNC (multinational corporation or company)
• The Corporation operates two large refineries of the country located in Kochi and
Mumbai.
• The company is India's 2nd largest downstream oil company and is ranked 275th
on the Fortune list of the world's biggest corporations as of 2019.[5] BPCL ranked
672 in the Forbes 2018 list.
• Well positioned to meet market demand across India through Strategically located
Refineries and Marketing Infrastructure
• It’s a customer –oriented organization
• redesigned organizational structure.
3
▪ Formation
• Founded: 1503 (Julian)

• Headquarters: Mumbai, Maharashtra, India
• In 1976, the company was nationalized under the Act on the Nationalisation of
Foreign Oil companies ESSO (1974), Burma Shell (1976) and Caltex (1977)
• On 24 January 1976, the Burmah Shell was taken over by the Government of
India to form Bharat Refineries Limited.
• On 1 August 1977, it was renamed Bharat Petroleum Corporation Limited.
Company history:
❖ A PIONEERING APPROACH
Burmah Shell began its operations with the import and marketing of Kerosene and soon proved
itself to be a pioneer in more ways than one. The company imported oil products in bulk and
transported them in 4-gallon and 1-gallon tins all over India. The company also took up the
challenge of reaching out to people in remote villages to ensure every home was supplied with
kerosene.
Showcasing its pioneering spirit, the company introduced LPG as a cooking fuel to Indian
homes in the mid-1950s Thus started the illustrious journey of many pioneering endeavours,
which went beyond selling petroleum, educating customers and offering better services and
products.
❖ THE RETAIL REVOLUTION
The first drive-through fuel station in India was built in 1928. Since then the country network
of Fuel Station has crossed 16,000 mark, with approximately 1 Crore vehicles fueling up every
day
Bharat Petroleum also launched several iconic initiatives, such as,
Pure for Sure
Premium Petrol & Diesel
Urban and Transport Loyalty Programme
Convenience Store
In & Out.
4
▪ Background
D Rajkumar (Chairman & MD) founder
When Oil discoveries were being made and industries expanded, John D. Rockefeller and his
business associates acquired control over numerous refineries and pipelines. With these
acquisitions under their belt, they went on to form the Standard Oil Trust – a giant in its own
right.
Observing this and to counter the growing significance of Standard Oil, three largest rivals -
Royal Dutch, Shell and Rothschild’s - came together to form a single organisation called
Asiatic Petroleum to market petroleum products in South Asia.
In 1928, Asiatic Petroleum (India) joined hands with the Burmah Oil Company, an active
producer, refiner and distributor of petroleum products, particularly in Indian and Burmese
markets to form the Burmah-Shell Oil Storage and Distributing Company of India Limited
Bharat Petroleum Corporation Limited (BPCL) is a global Fortune 500 petroleum company in
India. The company started off as Rangoon Oil and Exploration company set up to explore the
new discoveries off Assam and Burma during the British colonial rule of India. In 1889 during
vast industrial development, an important player in the South Asian market was the Burmah
Oil Company
BPCL is in the business of refining, storing, marketing, and distributing petroleum products
The government of India on the basis of an agreement reached with the UK- based Burma-
Shell, has incorporated Burmah-Shell Oil refineries Ltd. in the year 1952. In the year 1975,
with the passage of ‘The Burmah-Shell (acquisition of undertaking in India) Bill’, the
government took over the operations of the company and has changed its name to Bharat
Refineries
The company that sold only kerosene, slowly expanded to set up service stations to sell petrol
as well
Later Bharat Refineries became the first Indian company to introduce LPG for domestic
cooking purposes.
In the year 1977 the company’s name was changed to Bharat Petroleum Corporation Ltd.
(BPCL)
India’s 6th largest company by turnover over INR 3,376 bn in FY19 and INR 2,773 bn in
FY18
Majority Govt. of India shareholding of 53.29% and explicit Govt. support through under-
recovery compensation mechanism
The Govt. of India conferred BPCL with “MAHARATNA” status in Sep 2017
India’s 2nd largest Oil Marketing Company (OMC) with domestic sales volume of over
43.07 MMT in FY19 and 41.21 MMT in FY18
5
❖ Products
The 150,000 barrels per day Kochi Refinery is a fuel based refinery producing all petroleum
fuel products such as:
• Liquefied Petroleum Gas (LPG) and Superior Kerosene Oil (SKO) for households and
industrial uses • Motor Spirit (MS/ Petrol) and Hi-speed Diesel (HSD) for automobiles
• Naphtha, the major raw material for fertilizer and petrochemical industries
• Furnace Oil (FO), Light Diesel Oil (LDO) and Low Sulphur Heavy Stock (LSHS) as fuel for
industries • Aviation Turbine Fuel (ATF) for aircrafts
SPECIALTY PRODUCTS
• Benzene for manufacture of caprolactum, phenol, insecticides and other chemicals
• Special Boiling Point Spirit (SBPS) used as solvent in tyre industry
• Toluene for manufacture of solvents and insecticides, pharmaceuticals and paint
• Mineral Turpentine Oil (MTO) for use in textile and paint industry
• Sulphur for use in fertilizer, sugar, chemicals and tyre industry
• Poly Isobutene (PIB) for manufacture of lubricants and cable jelly
• Propylene as a feedstock for various petrochemicals
DIESEL ADDITIVE
After years of pure and applied research, Kochi Refinery hit upon the formula for high
performing Diesel. Kochi Refinery’s Diesel Additive is an indigenous product successfully
tested in laboratories both locally and globally. Trials at various stages in various types of
vehicles have also been completed. When used along with diesel in a specified proportion, it
improves the combustion inside engine cylinder, thereby reducing harmful exhaust emissions
and assuring better fuel efficiency.
6
VALUES OF THE COMPANY

• Trust is the bedrock of our existence
• Customer Centricity is intrinsic to our achievements

• Development of People is the only way to success
7
• Ethics govern all our actions

• Innovation is our daily inspiration
• Collaboration is the essence of individual action
• Involvement is the way we pursue our organisation goals
REGISTRATION
In 1976, the company was nationalized under the Act on the Nationalisation of Foreign Oil
companies ESSO (1974), Burma Shell (1976) and Caltex (1977). On 24 January 1976, the
Burmah Shell was taken over by the Government of India to form Bharat Refineries Limited.
Organisational structure
All Business Units of Bharat Petroleum has a three tier structure for carrying out HSSE related
functions, i.e. Location, Regional and Headquarter Level HSSE role holders. Though the
reporting of the location HSSE Officer is to the Location In-charge (Manager) / Territory
Manager (Occupier), there is a dotted line reporting relationship with the Regional and HQ
level HSSE role Holders. In addition to the HSSE administration structure at BU level, there is
a Corporate level HSSE set up which engages with the BUs in policy formulation, developing
strategies and business plan, incident investigations, competency building, providing MIS to
the Board.
8
9
10
Board of Directors
11
Number and types of securities and Annual Report

➢ BPCL is holding company that means a company created to buy and own the shares
of other companies, which it then controls.
➢ A holding company doesn't necessarily trade itself; its main purpose is to form a
corporate group
➢ Bharat petroleum’s stock trading symbol is BPCL
➢ It’s a NSE (national stock exchange of India Ltd) listed company
➢ Under ISIN: INE029A01011
➢ An International Securities Identification Number (ISIN) is a code that uniquely
identifies a specific securities issue.
➢ With Sectoral Index P/E: 42.47 which is a pretty high ratio a high P/E ratio indicates
that investors expect higher earnings.
➢ PE ratio is computed by dividing the market price with the company's earning per
share. The study of the historical trend in the PE ratio of the index gives useful
information to investors on the attractiveness of the market.
➢ total value of all a company's shares of stock i.e Market cap:- Rs 73,972 Cr
➢ P/B RATIO: 2.08
➢ P/B value, indicating a potentially undervalued stock. However, value investors often
consider stocks with a P/B value under 3.0.
➢ P/E RATIO: 20.08
➢ A higher P/E ratio shows that investors are willing to pay a higher share price today
because of growth expectations in the future.
➢ Shareholder returns of the company past 5 years including dividend
➢ BPCL: 42.2%11.6% INDUSTRY: 126.0%86.5% MARKET: 41.9%31.4%
➢ Dividend, A dividend is the distribution of some of a company's earnings to a class of
its shareholders, as determined by the company's board of directors.
12
Dividend mar 12 2020

Updated price to earning ratio
Return on equity signifies how good the company is in generating returns on the investment
it received from its shareholders
13
➢ Shares outstanding: 2.17b

➢ rading volume is the total number of shares of a security that were traded during a
given period of time.
➢ Face Value: 10.0
➢ Face value is a financial term used to describe the nominol or dollar value of a
security, as stated by its issuer. For stocks, the face value is the original cost of the
stock, as listed on the certificate
➢ Equity Share Capital in march 2020 is 1,966.88 with TOTAL SHARE CAPITAL of
1,966.88
➢ TOTAL NON-CURRENT LIABILITIES of year 2020 are 34,249.82
Which includes Long Term Borrowings, Deferred Tax Liabilities [Net], Other Long
Term Liabilities, Long Term Provisions
➢ TOTAL CURRENT LIABILITIES of year 2020 are 59,004.78
which includes Short Term Borrowings, Trade Payables, Other Current Liabilities,
Short Term Provisions
➢ Which makes TOTAL CAPITAL AND LIABILITIES worth 126,468.98
➢
CURRENT ASSETS
Current Investments 5,208.54
Inventories 20,421.06
Trade Receivables 5,164.34
14
Cash And Cash 115.78

Equivalents
Short Term Loans And 590.58

Advances
Other Current Assets 9,562.93
TOTAL CURRENT 41,063.23

ASSETS
TOTAL ASSETS 126,468.98
Company financials and quarterly Results
15
Does BPCL produce enough cash relative to debt?

Over the past year, BPCL has ramped up its debt from ₹357.25b to ₹376.59b – this includes
both the current and long-term debt. With this increase in debt, BPCL currently has ₹47.09b
remaining in cash and short-term investments for investing into the business. Additionally,
BPCL has generated ₹110.68b in operating cash flow in the last twelve months, resulting in an
operating cash to total debt ratio of 29.4%, meaning that BPCL’s current level of operating
cash is high enough to cover debt. This ratio can also be interpreted as a measure of efficiency
as an alternative to return on assets. In BPCL’s case, it is able to generate 0.29x cash from its
debt capital.
Does BPCL’s liquid assets cover its short-term commitments?

With current liabilities at ₹457.02b, it appears that the company has not been able to meet these
commitments with a current assets level of ₹405.99b, leading to a 0.89x current account ratio.
which is under the appropriate industry ratio of 3x.
16
AUDITORS REPORT
Company auditors report
AUDITORS
M/s. CVK & Associates AND M/s. Borkar & Muzumdar
Key audit matters

1 COMPUTATION OF EXPECTED CREDIT LOSS (ECL):
Trade receivables and loans to LPG consumers granted under the PRADHAN MANTRI
UJWALA YOJANA (PMUY) scheme constitute a significant component of the total current
assets of the corporation.
➢ AUDITORS RESPONSE:
• In respect of loans to LPG consumers granted under the PMUY scheme they
reviewed the methodology used for segregating the total outstanding loans into
buckets and the assumptions underlying probability of default estimates in respect
of the same
• Based on discussions with the management they understand that this methodology
was arrived at after discussion with few industry peers
2 INVESTMENTS IN E&P SUBSIDIARY:

The corporation has an investment of Rs 5494.41 crores in 100% subsidiary bharat petro
resources ltd (bprl).
➢ AUDITORS RESPONSE
• They had evaluated the design and implementation of key controls in relation to
the impairment testing carried out by the corporation for e&p assets.
• They reviewed the audited financial statements of bprl and the independent
auditor's report thereon to ascertain if there are any signs of permanent
diminution in the corporation's investments therein.
17
3 EVALUATION OF CONTINGENT LIABILITIES:

Contingent liabilities are not recognized in the financial statements but are disclosed unless the
possibility of an outflow of economic resources is considered remote. Contingent liabilities
disclosed are in respect of items which in each case are above the threshold limit.
• They examined sample items above the threshold limit for recognition of
contingent liabilities and obtained details of completed excise vat/ sales tax/
entry tax assessments and demands as on march 31 2019.
• They have assessed the management's underlying assumptions in estimating the
possible outcome of the disputes.
• They also considered legal precedence and other rulings in evaluating
management's position on these uncertain tax positions
4 INVENTORIES:
Valuation of inventories is a significant area requiring management's judgment of estimates
and application of accounting policies that have significant effect on the amounts recognized
in the financial statements.
• Audit team evaluated the system of inventory monitoring and control. It was
observed that inventory has been physically verified by the management during
the year at reasonable intervals
• In respect of inventory lying with third parties they have ascertained that these
have substantially been confirmed by them.
• Audit team has physically verified on sample basis the inventories at various
locations and compliance with cut off procedures. We examined the system for
records maintenance for stocks lying at third party locations.
18
5 PROPERTY PLANT & EQUIPMENT:

Estimates of useful lives and residual value of property plant and equipment is a significant
area requiring management judgment of estimates and application of accounting policies that
have significant effect on the amounts recognized in the financial statements.
➢ AUDITOTS RESPONSE
• They examined whether the corporation has maintained proper records

showing full particulars including quantitative details and situation of fixed
assets.
• The physical verification of fixed assets (except lpg cylinders and pressure
regulators with customers) has been carried out by the management in
accordance with the phased program of verification of all assets which was
reviewed by team.
• The useful life of the major assets was adopted based on internal estimate and
was also comparable with other entities in the same industry. team have tested
the computation of depreciation on sample basis
.
The Corporation's Board of Directors is responsible for the preparation of the other
information. The other information comprises the information included in the Management
Discussion and Analysis Board's Report including Annexures to Board's Report Business
Responsibility Report Corporate Governance and Shareholder's Information but does not
include the Standalone Ind AS Financial Statements and audit team report thereon.
Auditors opinion on the Standalone Ind AS Financial Statements does not cover the other
information and he or she do not express any form of assurance thereon.
MEETINGS
In August 1 1977 the company was renamed as Bharat Petroleum Corporation Ltd
First AGM held in 1953
67th Annual General meeting ( AGM) was held on 28th September 2020 at 1100 hrs through
video conferencing Because of COVID scenario
Annual Report of Financial year 2019-20 was sent to the shareholders through their registered
Email Ids
Board meeting for financial results was held on 13 Aug 2020
To consider and approve the financial results for the period ended March 31, 2020 and to decide
dividend
19
12-Mar-2020: The Company has informed the Exchange that a Board meeting to be held on
March 06, 2020 has been re-scheduled. Further, the Company has informed the Exchange
that the meeting of the Board of Directors of the Company will be held on March 12, 2020,
To consider dividend
Since covid no important Decisions where taken.
Ex-date purpose
18-sep-2020: annual general meeting
23-mar-2020: interim dividend - Rs 16.50 per share
21-aug-2019: dividend - Rs 8 per share
21-feb-2019: interim dividend Rs - 11 per share
31-aug-2018: annual general meeting/dividend Rs- 7 per share
Important decisions in AGM’ s
06-02-2006 EGM 27-02-2006 - - To approve: 1.

Amendment to the
Articles of Association
for increasing the
number of Directors
from twelve to sixteen.
2. Increase in the
Borrowing Powers of
the Company.
28-11-2005 EGM 16-01-2006 - - To consider and, if

thought fit, approve,
with or without
modifications, the
Arrangement embodied
in the Scheme of
Amalgamation proposed
to be entered into
between Kochi
Refineries Ltd and with
the Co., pursuant to the
Order of the Dept. of Co.
Affairs
20
Tax rates
Rs. Cr
Tax March 2020: -14 March 2019: 4,377 March 2018: 4,381 March2017: 4,192
March 2016: 4,042
NEW REGULATIONS AND AMENDMENTS
• On account of privatization of BPCL the government will provide guidance on

employee protection, asset stripping and business continuity in Bharat Petroleum
Corp Ltd (BPCL) to potential acquirers of the company only at a later stage of
bidding, according to privatisation rules issued by the disinvestment department.
• Rules pertaining to labour laws are said to be one of the many considerations that will
guide bids, particularly those from foreign firms.
• A potential acquirer of BPCL may want to shed excess workforce, which is a typical
legacy issue with all public sector units, as well as strip some of the non-essential
assets such as land and buildings.
• So there should be some provisions made to insure the protection of labour and
employee class
• On a query on restrictions relating to employee protection, asset stripping, business
continuity and lock-in of shares, DIPAM said, "This information shall be provided to
the Qualified Interested Parties (QIPs) in the RFP/ SPA (Request for Proposal/ Share
Purchase Agreement)."
• BPCL has offered its employees stock options at one-third of the market price as the
company looks to reward staff ahead of its privatisation
• The board of BPCL "approved the proposed Employee Stock Purchase Scheme
(ESPS) to the specified employees through the trust mechanism, subject to the
approval of the shareholders", the company said in a regulatory filing.
21
CURRENT MARKET DYNAMICS
• Bharat Petroleum Corporation Limited (“BPCL”) is a Central Public Sector Enterprise

(“CPSE”), under the administrative control of Ministry of Petroleum and Natural Gas,
Government of India engaged primarily in the activity of refining and marketing of
petroleum products.
• The Government of India (“GoI”) is proposing strategic disinvestment of its entire
shareholding in BPCL comprising of 1,14,91,83,592 equity shares, which constitutes
52.98% of BPCL’s equity share capital (“Stake”) along with transfer of management
control to a strategic buyer [except BPCL’s equity shareholding of 61.65% in
Numaligarh Refinery Limited (“NRL”)].
• In short he government is selling its entire 52.98 per cent stake in India's second-largest
fuel retailer and third-biggest oil refiner
• disinvestment process is to be implemented through competitive bidding route.
• Preliminary expressions of interest or EoIs are due on September 30, which will be
followed by qualified bidders being asked to submit financial or price bids.
• The international Credit Rating Agency Moody's warned of downgrading Bharat
Petroleum Corporation (BPCL) to Ba1, if the government goes ahead with privatisation
by selling its stake to private entity.
• Yet GOI is firm on selling its share.
BIBLIOGRAPHY
1) https://www.moneycontrol.com/india/stockpricequote/refineries/bharatpetroleumcorp
oration/BPC moneycontrol.com
2) https://www1.nseindia.com/live_market/dynaContent/live_watch/get_quote/GetQuote
.jsp?symbol=BPCL&illiquid=0&smeFlag=0&itpFlag=0# NSEindia.com
3) https://www.bharatpetroleum.com/sustainability/health-safety-security-and-
environment/organogram.aspx
4) https://www.bharatpetroleum.com/pdf/OurFinancial/Annual-Report-2019-20-67483a-
dce1c9-aa0e16.pdf annual report bpcl
5) https://www.business-standard.com/article/companies/bpcl-privatisation-govt-rules-
on-worker-protection-asset-stripping-later-120090600478_1.html
THANK YOU!
22

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Ramnarain Ruia Autonomous College, Matunga, Mumbai 400019

Class: FYBA Sem:1 Commerce Assignment

Commerce Assignment for Year: 2020-21

Paper code: RUACOM101

Paper title: Introduction to business Organisation

Topic of Assignment: Bharat petroleum Corporation Limited

Name of the student: Dattaprasad S Ambre

Date: 09 October 2020

S. No. Particulars Page no.

6 Number and types of securities and annual Report 12

10 New Regulations and Amendments 21

11 current market dynamics 22

Bharat petroleum Corporation Limited

• Type: Public Sector Undertaking

• Founded: 1503 (Julian)

VALUES OF THE COMPANY

• Customer Centricity is intrinsic to our achievements

• Ethics govern all our actions

Number and types of securities and Annual Report

Dividend mar 12 2020

➢ Shares outstanding: 2.17b

Current Investments 5,208.54

Trade Receivables 5,164.34

Cash And Cash 115.78

Short Term Loans And 590.58

Other Current Assets 9,562.93

TOTAL CURRENT 41,063.23

TOTAL ASSETS 126,468.98

Company financials and quarterly Results

Does BPCL produce enough cash relative to debt?

Does BPCL’s liquid assets cover its short-term commitments?

Key audit matters

2 INVESTMENTS IN E&P SUBSIDIARY:

3 EVALUATION OF CONTINGENT LIABILITIES:

5 PROPERTY PLANT & EQUIPMENT:

• They examined whether the corporation has maintained proper records

First AGM held in 1953

06-02-2006 EGM 27-02-2006 - - To approve: 1.

28-11-2005 EGM 16-01-2006 - - To consider and, if

NEW REGULATIONS AND AMENDMENTS

• On account of privatization of BPCL the government will provide guidance on

CURRENT MARKET DYNAMICS

• Bharat Petroleum Corporation Limited (“BPCL”) is a Central Public Sector Enterprise

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