bpcl fience

7/27/2019 bpcl fience

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:

PROJECT REPORT IN bpcl

Bharat

Petroleum

CorporationLtd.


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Serial no. CONTENTS Page no.

1. Introduction 4

2. Capital Structure Theory 8

3. Trend Analysis 14

4. Fund Flow Analysis 31

5. Dividend Policy 34

6. Leverage 37

7. Du-Pont Analysis 39

8. External Fund Requirement 42

9. Comparative Statements 46

10. Common Size Statements 47

11. Working Capital Management 52

12. Anexures & Bibliography 57


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INTRODUCTION

As a part of our curriculum, we are doing a project which is basically an Analysis of Bharat Petroleum Corporation Ltd. (BPCL). The Analysis has been

done on the front of financial concepts.

We have taken into consideration the data of last 5 years (2006-07 to 2010-11) from the financial statements of the companies.

Industry Overview:

Oil and gas sector is one of the key catalysts in fuelling the growth of Indian economy. With a 1.2 billion population and an economy that has

consistently at approximately 8 per cent annually, India's energy needs are increasing fast, warranting a robust demand for oil and natural gas in the

country.

India has emerged as the 5th largest refining country in the world, accounting for 4 per cent of the world's refining capacity.

India exported 50 million tonnes (MT) of refined petroleum products during 2010-11. With our refining capacity increasing further, this figure is

likely to touch about 70 MT by 2014, making India one of the world's major exporters of petroleum products.

The share of oil and natural gas in India's total primary energy demand is 40 percent. The planned investments span across the oil and gas.

India will account for 12.4 per cent of Asia Pacific regional oil demand by 2015, while satisfying 11.2 per cent of the supply.

In addition, India is also the world's fourth largest importer of oil. The petroleum and natural gas industry in India has attracted foreign direct investment (FDI) worth US$ 3.280.72 million from April 2000 to

September 2011, according to the data provided by Department of Industrial Policy and Promotion (DIPP). The Department further recorded US$

144 million during AprilSeptember 2011-12, in the industry.


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BPCL:

Vision

We are a leading energy company with global presence through sustained aggressive growth and high profitability

We are the first choice of customers, always

We exploit profitability growth opportunity outside energy

We are the most environment friendly company

We are a great organisation to work for

We are a learning organisation

We are a model corporate entity with social responsibility

Early History - Dawn of a New Era

Do take some time off for a brief interlude with the past, as we take you back in time to the evolution of Bharat Petroleum Corporation Limited. A new

chapter in the history of Indian industry.

Petroleum (derived from Latin Petra - rock and oleum - oil) first came up in wells drilled for salt. People found it useful as illuminating oil and the

demand for it steadily increased.

Samuel Kier, a Pittsburgh druggist, bottled and marketed Petroleum as medicinal cure. To market a deodorised variant, he designed the first primitive

refinery in 1852, which was a huge improvised kettle, connected to a metal tank.

'Colonel' Edwin Drake and 'Uncle' Billy Smith drilled a well with the specific objective of finding oil, and on 27th August 1859, they 'struck oil' at

Titusvale, in North Western Pennsylvania, USA, at a depth of 69.5 ft.

From Nothing to Gold

The 1860s saw vast industrial development. A lot of petroleum refineries also came up.


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An important player in the South Asian market then was the Burmah Oil Company. Though incorporated in Scotland in 1886, the company grew out of

the enterprises of the Rangoon Oil Company, which had been formed in 1871 to refine crude oil produced from primitive hand dug wells in Upper

Burma.

The search for oil in India began in 1886, when Mr. Goodenough of McKillop Stewart Company drilled a well near Jaypore in upper Assam and struck

oil. In 1889, the Assam Railway and Trading Company (ARTC) struck oil at Digboi marking the beginning of oil production in India.

While discoveries were made and industries expanded, John D Rockefeller together with his business associates acquired control over numerous

refineries and pipelines to later form the giant Standard Oil Trust. The largest rivals of Standard Oil - Royal Dutch, Shell, Rothschilds - came together to

form a single organisation: Asiatic Petroleum to market petroleum products in South Asia.

In 1928, Asiatic Petroleum (India) joined hands with Burmah Oil Company - an active producer, refiner and distributor of petroleum products,

particularly in Indian and Burmese markets. This alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India Limited.

The Pioneering Spirit - Burmah Shell Marketing

A pioneer in more ways than one, Burmah Shell began its operations with import and marketing of Kerosene. This was imported in bulk and transported

in 4 gallon and 1 gallon tins through rail, road and country craft all over India.

The company took up the challenge of reaching out to the people even in the remote villages to ensure every home had its supply of kerosene. The

development and promotion of efficient kerosene-burning appliances for lighting and cooking was an important part of kerosene selling activity.

With motor cars, came canned Petrol, followed by service stations. In the 1930s, retail sales points were built with driveways set back from the road;

service stations began to appear and became accepted as a part of road development. After the war Burmah Shell established efficient and up-to-date

service and filling stations to give the customers the highest possible standard of service facilities.

On 15th October 1932, when civil aviation arrived in India, the company had the honour of fuelling J.R.D. Tata's historic solo flight in a single engined

de Havillian Puss Moth from Karachi to Bombay (Juhu) via Ahmedabad. Thirty years later, i.e. in 1962, Burmah Shell again had the privilege to fuel

JRD Tata's re-enactment of the original flight. Burmah Shell also fuelled flying boats, which carried airmail at slightly higher rates than sea transport, at

several locations.


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As a true pioneer would, the company introduced LPG as a cooking fuel to the Indian home in the mid-1950s. And all along, it went beyond selling

petroleum, to educate the customer. Besides selling Bitumen, the company pioneered desert road construction, training road engineers. It provided free

technical services to industrial customers - big and small - and it became a part of the company's culture.

On Stream - The Burmah Shell Refinery

An agreement to build a modern refinery at Trombay, Bombay was signed between the Burmah Shell group of companies and the Government of India

on 15th December 1951.

Burmah Shell Refineries Limited was incorporated as a private limited company under the Indian Companies Act on 3rd November 1952, and work

began on the marshland of Trombay at Bombay. Man and machine worked relentlessly, and soon the swamps gave way to towers and tanks of steel, and

miles of pipeline.

The refinery on 454 acres of land at village Mahul went on-stream on 30th January 1955, one year ahead of schedule. Dr. S. Radakrishnan, Vice

President of India, declared the 2.2 MMTPA (Million Metric Tonnes Per Annum) Refinery open on 17th March 1955. It was then the largest refinery in

India then.

With this infrastructure, free India moved one step closer to self-reliance.

From Burmah Shell to Bharat Petroleum

On 24th January 1976, the Burmah Shell Group of Companies was taken over by the Government of India to form Bharat Refineries Limited. On 1st

August 1977, it was renamed Bharat Petroleum Corporation Limited. It was also the first refinery to process newly found indigenous crude (Bombay

High), in the country.

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Capital Structure Theory

The value of a firm depends upon its expected earnings stream and the rate used to discount the stream. The capital structure of a firm can affect this

value by changing either expected earnings or cost of capital or both. But the effect of leverage on the value of the firm is not very clear.

NET INCOME APPROACH: (Kd < Ko < Ke)

According to this approach, the cost of equity (Ke) and the cost of Debt (Kd) are assumed to remain unchanged and they are independent of theCapital Structure. But the Average Cost of Capital (Ko) changes with the change in the leverage (Debt-Equity ratio).


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Actual (In Crs.)

2011 2010 2009 2008 2007

Net Operating Income 2411.15 2364.55 1002.71 2596.39 2766.99

Interest on Debt 1,100.78 1,010.95 2,166.37 672.47 532.69

Equity Earnings 1310.37 1353.60 -1163.66 1923.92 2234.30

Cost Of Equity (Ke) 13.73% 13.73% 13.73% 13.73% 13.73%

Cost Of Debt (Kd) 6% 5% 10% 4% 5%

Market Value Of Equity

(E) 9544.31 9859.18 -8475.72 14013.20 16273.91

Market Value Of Debt

(D) 18971.87 22195.2 21171.41 15022.38 10829.24

Total Value Of Firm

(V) 28516.18 32054.38 12695.69 29035.58 27103.15

Cost Of Capital (Ko) 8.46% 7.38% 7.90% 8.94% 10.21%


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Total Debt 18971.87 22195.20 21171.41 15022.38 10829.24

If no Debt had been used

2011 2010 2009 2008 2007

Net Operating Income 2,411.15 2,364.55 1,002.71 2,596.39 2,766.99

Interest on Debt 0.00 0.00 0.00 0.00 0.00

Equity Earnings 2411.15 2364.55 1002.71 2596.39 2766.99

Cost Of Equity (Ke) 13.73% 13.73% 13.73% 13.73% 13.73%

Cost Of Debt (Kd) 6% 5% 10% 4% 5%


(E) 17562.03 17222.61 7303.41 18911.25 20153.85

Market Value Of Debt

(D) 0 0 0 0 0

Total Value Of Firm

(V) 17562.03 17222.61 7303.41 18911.25 20153.85


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Cost Of Capital (Ko) 13.73% 13.73% 13.73% 13.73% 13.73%

Total Debt 0.00 0.00 0.00 0.00 0.00

Analysis: BPCL have Debt in their Capital structure. So, keeping other things constant, we will now consider a hypothetical situation in which the

company has all equity financed. This is done to show that the company having no debt in their capital structure will have a higher average cost of

capital in contrast to the firm having some amount of debt.

Now, from our calculations, we can analyze that if BPCL does not use debt then its Ko (for 2011) is 13.73% , whereas if it had used debt (like the

actual scenario) then its Ko is 8.46%,. So, it had used a very small portion of debt but the effect was that the companys Ko was reduced, which is

the ultimate objective of any company. Same thing is seen for the earlier years also.

Conclusion: So, we can conclude that NI approach holds true for all three our companies and given the companys policies, they should try

to minimize their cost of capital.

NET OPERATING INCOME APPROACH:

According to this approach, the overall capitalization rate (Ko) and the cost of debt (Kd) remain constant for all degree of leverage. The rationale

behind this theory is that if the companies increase the debt proportion in their capital structure, then this risk will be compensated by the increase in

the required rate of return of the equity shareholders (Ke).


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Actual (In Crs.)

2011 2010 2009 2008 2007Net Operating Income 2411.15 2364.55 1002.71 2596.39 2766.99

Overall Capitalization

Rate (Ko) 8.46% 7.38% 7.90% 8.94% 10.21%

Total Value Of Firm (V) 28516.18 32054.38 12695.69 29035.58 27103.15

Interest on Debt 1,100.78 1,010.95 2,166.37 672.47 532.69

Cost Of Debt (Kd) 6% 5% 10% 4% 5%

Market Value Of Debt (D) 18971.87 22195.20 21171.41 15022.38 10829.24


(E) 9544.31 9859.18 -8475.72 14013.20 16273.91

Equity Earnings 1310.37 1353.60 -1163.66 1923.92 2234.30


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Cost Of Equity (Ke) 13.73% 13.73% 13.73% 13.73% 13.73%

Total Debt 18971.87 22195.20 21171.41 15022.38 10829.24

Suppose debt interest increase

2011 2010 2009 2008 2007

Net Operating Income 2411.15 2364.55 1002.71 2596.39 2766.99

Overall Capitalization Rate

(Ko) 8.46% 7.38% 7.90% 8.94% 10.21%

Total Value Of Firm (V) 28516.18 32054.38 12695.69 29035.58 27103.15

Interest on Debt 1200.00 1100.00 2100 700 600

Cost Of Debt (Kd) 6% 5% 10.23% 4.48% 4.92%

Market Value Of Debt (D) 20681.92 24150.27 20522.79 15637.38 12197.61

Market Value Of Equity 7834.26 7904.10 -7827.10 13398.21 14905.54


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(E)

Equity Earnings 1211.15 1264.55 -1097.29 1896.39 2166.99

Cost Of Equity (Ke) 15.46% 16.00% 14.02% 14.15% 14.54%

Analysis: Keeping other things constant, we have our actual company data and we have taken a hypothetical situation wherein the amount of debt

used by the company has increased. This will show us how the Ke increases, if we go on increasing the debt portion.

Now, from our calculations, we can analyze that if BPCL uses more debt i.e., the

interest amount increase from 110.76 crores to 1200.00 crores, then Ko, Kd

remaining constant, the Ke of the company increases from 13.73% to 15.46%

(for 2011).

Conclusion: So we can conclude that NOI approach holds true for our companies and the risk will be adjusted by increase in Ke.

TREND ANALYSIS

1. Current Ratio: - A current ratio greater than 1 indicates company is in a good position to get rid of its short-term liabilities immediately.

BPCL- Here over the last 5 years we see that current ratio is more than 1, which is considered as healthy for business. However the

highest ratio was obtained in the year 2010 (1.37) and in 2011 it declined to 1.25.

Current Ratio

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

1.257192 1.376669 1.191493 1.351636 1.209076


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2. Quick Ratio: - Quick ratio does not involve available inventories and hence a more appropriate measure of companys ability to meet its current

liability. It uses the immediate liquid assets available to the company. A ratio greater than 1 shows the ability of the company to immediately

meet the current liabilities when required.

BPCL- Clearly for all the 5 years the quick ratio is less than 1. There has been a decline in ratio from 0.67 in 2010 to 0.55 in 2011.

1.05

1.1

1.15

1.2

1.25

1.3

1.35

1.4


BPCL

Quick Ratio

2011 2010 2009 2008 20070.556998 0.674506 0.659675 0.624368 0.44081


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3. Absolute Quick Ratio: - An absolute quick ratio greater than 0.5(50%) is considered good enough because it even eliminates accounts

receivables.

BPCL- Here for all the 5 years we see that the ratio is less than 0.5 thus it shows that less availability of cash, bank and marketable securities.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2011 2010 2009 2008 2007

BPCL


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Absolute Ratio

2011 2010 2009 2008 2007

0.017304 0.019985 0.034412 0.065951 0.076635

4. Debt-equity ratio: - It shows what proportion of debt and equity the company is using to finance its assets.

BPCL- It clearly shows that ratio is greater in 2009(1.74) than 2010(1.69) and 2011(1.34). It shows the company relied heavily in financing

its fund through debt in 2009 compared to that in 2010 and 2011.

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

2011 2010 2009 2008 2007

BPCL


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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2011 2010 2009 2008 2007

BPCL

Debt-Equity Ratio

2011 2010 2009 2008 2007

1.349579 1.696011 1.745648 1.286512 1.05409


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5. Proprietary Ratio: - Proprietary ratio highlights the financial position of the company and therefore Proprietary ratio can be interpreted as good if

it is high because a higher proprietary ratio would imply that company has enough capital to repay its creditors whenever the creditors make any

such demand.

BPCL- Highest ratio was obtained in the year 2007(0.30).

.

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

2011 2010 2009 2008 2007

BPCL

Proprietory Ratio

2011 2010 2009 2008 2007

0.25105 0.245657 0.256029 0.273072 0.304319


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6. Interest Coverage Ratio: - it shows how easily a company can pay interest on outstanding debt. When a company's interest coverage ratio is 1.5 or

lower, its ability to meet interest expenses may be questionable. An interest coverage ratio below 1 indicates the company is not generating

sufficient revenues to satisfy interest expenses.

BPCl- Here except for 2009(1.46) in all other years the ratio is more than 3.

Interest Coverage Ratio

2011 2010 2009 2008 2007

3.190401 3.338939 1.462853 4.860975 6.194372

0

1

2

3

4

5

6

7

2011 2010 2009 2008 2007

BPCL


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7. Inventory Ratio: - A ratio showing how many times a company's inventory is sold and replaced over a period.

BPCL- Here we see a high ratio in the year 2007(21.03) compared to other years.

Inventory Ratio

2011 2010 2009 2008 2007

10.67464 12.74447 14.57726 10.85444 21.0349

0

5

10

15

20

25

2011 2010 2009 2008 2007

BPCL


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8. Debtor Turnover Ratio: - Debtors turnover ratio indicates the number of times the debtors are turned over a year. The higher the value of

debtors turnover the more efficient is the management of debtors or more liquid the debtors are. Similarly, low debtors turn over ratio implies

inefficient management of debtors or less liquid debtors.

BPCL- Here in the year 2007(127.15) the highest ratio has been obtained as compared to other years.

Debtor Turnover Ratio

2011 2010 2009 2008 2007

56.65403 59.56668 88.36557 70.48043 127.1547

9. Creditor Turnover Ratio: - It signifies the credit period enjoyed by the firm in paying creditors. Accounts payable include both sundry creditors

and bills payable. A high creditors turnover ratio or a lower credit period ratio signifies that the creditors are being paid promptly. This situation

0

20

40

60

80

100

120

140

2011 2010 2009 2008 2007

BPCL


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enhances the credit worthiness of the company.

BPCL- Here in 2007(15.71) we observe a high ratio than other years.

Creditor Turnover Ratio

2011 2010 2009 2008 2007

7.205802 7.676383 8.887069 7.858434 15.71678

10.Fixed Asset Turnover Ratio: - Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit

0

2

4

6

8

10

12

14

16

18

2011 2010 2009 2008 2007

BPCL


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earning capacity of the concern. Higher the ratio, greater is the intensive utilization of fixed assets. Lower ratio means under-utilization of fixed

assets.

BPCL- Comparatively to the other years 2009() has a high ratio thus denoting intensive utilization than other years.

11.Gross Profit Ratio: - A higher gross profit ratio represents higher gross profit to net sales.

0

2

4

6

8

10

12

2011 2010 2009 2008 2007

BPCL

Fixed Assets Turnover Ratio

2011 2010 2009 2008 2007

8.870489 7.52233 9.573688 8.653698 8.159695


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BPCL- Clearly it states that in 2007(0.038) the ratio is highest and then it gradually declines over the next 4 years. As compared to

2010(0.029) there is a decline in ratio in 2011(0.026).

12.Net Profit Ratio: - If the net profit is high, the firm will be able to achieve a satisfactory return on its investment.

BPCL- Higher the ratio higher is the profitability. Clearly it states that in 2007(0.018) is the highest and the lowest in 5 years has been

observed in the year 2009(0.005).

0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

0.04

2011 2010 2009 2008 2007

BPCl

Gross Profit Ratio

2011 2010 2009 2008 20070.026948 0.029622 0.015502 0.033524 0.03802


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0

0.002

0.004

0.006

0.008

0.010.012

0.014

0.016

0.018

0.02

2011 2010 2009 2008 2007

BPCl

Net Profit Ratio2011 2010 2009 2008 2007

0.01025 0.012628 0.005489 0.014342 0.018699


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13.Operating Profit Ratio: - Operating ratio shows the operational efficiency of the business. Lower operating ratio shows higher operating profit

and vice versa. An operating ratio ranging between 75% and 80% is generally considered as standard for manufacturing concerns.

0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

0.04

0.045

0.05

2011 2010 2009 2008 2007

BPCL

Operating Profit Ratio

2011 2010 2009 2008 2007

0.034243 0.037924 0.031661 0.039626 0.043537


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14.Return on Capital Employed: - OCE should always be higher than the rate at which the company borrows; otherwise any increase in borrowing

will reduce shareholders' earnings.

BPCL- Here highest ROCE has been observed in the year 2007(0.155) amongst all the years.

Return on Capital Employed

2011 2010 2009 2008 2007

0.106327 0.095672 0.095169 0.122433 0.156362

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

2011 2010 2009 2008 2007

BPCL


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15.Return on Net worth Capital: - A measure of how effectively a company uses the money (borrowed or owned) invested in its operations.

BPCL- Here we see that almost a steady return with less fluctuation has been observed except the year 2009(2.03)

0

1

2

3

4

5

6

2011 2010 2009 2008 2007

BPCL

Return on Net Worth Capital

2011 2010 2009 2008 2007

4.278033 4.252973 2.035459 4.371743 4.993832


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16.Return On Equity: - Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money

shareholders have invested. Returns between 15-20 % are considered satisfactory.

BPCL- It is obtained in the year 2007(17%) where as a dissatisfactory result has been viewed in the year 2009(6%)

Return on Equity

2011 2010 2009 2008 2007

0.110024 0.117495 0.060677 0.135359 0.17574

P/E Ratio

2011 2010 2009 2008 2007

14.28936 12.14922 18.50453 9.407058 6.052502


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17.P/E Ratio: - A valuation ratio of a company's current share price compared to its per-share earnings. In general, a high P/E suggests that investors

are expecting higher earnings growth in the future compared to companies with a lower P/E ratio.

BPCL- Here we see highest ratio has been obtained in the year 2009(18.504) which means people were expecting a greater return in the

future.

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

0.2

2011 2010 2009 2008 2007

BPCl


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ANALYSIS OF FUNDS FLOW STATEMENT

Funds flow statement is useful for long term analysis. Such an analysis is of great help to management, shareholders, creditors, brokers etc.

1. The fund flow statement helps in answering the following question:

a. Where have the profit gone?b. Why there is an imbalance existing between liquidity position and profitability position of the company?

c. Why is the concern financially solid in spite of losses?

0

2

4

6

8

10

12

14

16

18

20

2011 2010 2009 2008 2007

BPCL


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2. A projected funds flow statement can be prepared and resources can be properly allocated after an analysis of the present state of affairs. The

optimal utilization of available funds is necessary for the overall growth of the company. The funds flow statement prepared in advance gives a

clear cut direction to the management in this regard.

3. The funds flow statement analysis helps the management to test whether the working capital has been effectively used or not and whether the

working capital has been effectively used or not and whether the working capital level is adequate or inadequate for the requirement of business.

In case of BPCL we can observe that there is an increase in the current assets from 2010 to 2011 and this led to an increase in the working

capital. But, there has been a greater proportion of increase in the current liabilities .Therefore, there is a net decrease in the working capital

from 2010 to 2011.

The net decrease in the working capital means i.e. when changes in working capital is negative, the company is investing heavily in its current

assets, or else drastically reducing its current liabilities.

4. The funds flow statement analysis helps the investors to decide whether the company has managed funds properly. It also indicates the credit

worthiness of a company which helps the lenders to decide whether to lend money to the company or not. It helps management to take policy

decisions and to decide about the financing policies and capital expenditure programmed for future.


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Statement of change in working Capital

Particulars 2011 2010 change

Current Assets, Loans &

Advances

Inventories 15,375.08 12,028.86 3346.22

Sundry Debtors 2,664.42 2,662.68 1.74

Cash and Bank 379.97 342.36 37.61

Loans and Advances 9,186.36 8,550.03 636.33

Total Current Assets 27,605.83 23583.93 4021.9

Current Liabilities

Current Liabilities 18,788.29 14,550.56 -4237.73

Provisions 3,170.03 2,580.59 -589.44

Total Current Liabilities 21958.32 17131.15 -4827.17

0

Increase/Decrease in working

capital -805.27


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Funds from Operations

Particulars Amount

Reserves total 970.91add:depreciation 1591.73

div paid 506.16

deferred tax 148.24

Extraordinary item 131.8

TOTAL 3348.84

Fund flows

Sources of funds Amount

Application of

funds Amount

secured loans 6410.77

Investments 2123.37 Column1

Funds from operations 3348.84 Dividend paid 506.16

Unsecued loans 3187.44

Capital WIP 1505.52 gross block 3921.71

change in working cap 805.27 Extraordinary item 131.8

TOTAL 10970.44 TOTAL 10970.44


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DIVIDEND POLICY

Essence of Dividend Policy:

If the company is confident of generating more than market returns then only it should retain higher profits and pay less as dividends (or pay no

dividends at all), as the shareholders can expect higher share prices based on higher RoI of the company. However, if the company is not confident of

generating more than market returns, it should pay out more dividends (or 100% dividends). This is done for two reasons. One, the shareholders prefer

early receipt of cash (liquidity preference theory) and second, the shareholders can invest this cash to generate more returns (since market returns are

expected to be higher than returns generated by the company). Over the years, various models have been developed that establish the relationship

between dividends and stock prices.

ANALYSIS OF THE WALTER MODEL

Every firm faces a situation where it has to decide whether to plough back profits and re-invest or distribute them to shareholders in the form of

dividends.

The optimal payout ratio of BPCL is increasing because as the rate of return is lesser than the cost of capital, it implies that the company does not have

good investments and opportunities are not there to earn higher returns than available in the market. It is not beneficial for the company as well as its

shareholders to invest in new projects. The shareholders, instead, can invest their money somewhere else. Same thing is seen for previous years also.


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ANALYSIS OF THE GORDON MODEL

This model supports the view that the dividend policy of a company has a bearing on its share valuation. It assumes that the investors are rational and

risk-averse.

Based on the models assumptions, we can see that ,BPCL(r


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GORDAN MODEL

Year

2011 2010 2009 2008 2007

Dividend Per

Share 140.00 140.00 70.00 40.00 160.00

dividend pay

out ratio 33% 33% 34% 9.15% 32.04%

Retention Ratio 67% 67% 66% 91% 68%

EPS 42.7800773 42.52948 20.35447 43.71717 49.93803

Internal rate of

return (r ) 8.19% 6.55% 8.91% 9.95% 11.26%

Cost Of

equity(Ke) 13.73% 13.73% 13.73% 13.73% 13.73%

Market Price

of share 126.69 120.96 65.64 31.21 158.09


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Profit Before Tax 2,411.15 2,364.55 1,002.71 2,596.39 2,766.99

Tax 716.23 1,130.18 495.69 889.73 923.04

Interest 1,100.78 1,010.95 2,166.37 672.47 532.69

Internal rate of return ( r 0.081852 0.065479 0.089115 0.099541 0.112622

Leverages

Year 11-Mar 10-Mar 09-Mar 08-Mar 07-Mar

Sales Turnover 163218.21 131499.72 145392.07 121684.07 107452.27

Excise Duty 12317.36 9735.01 11329.13 11475.94 10895.42


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Net Sales 150900.85 121764.71 134062.94 110208.13 96556.85

Net Profit 1546.68 1537.62 735.90 1580.56 1805.47

Interest 1100.78 1010.95 2166.37 672.47 532.69

Tax 716.23 1130.18 495.69 889.73 923.04

Fringe Benefit tax 0.00 0.00 13.25 15.30 11.73

Deferred Tax 148.24 -303.25 -242.13 110.80 26.75

EBIT 3511.93 3375.50 3169.08 3268.86 3299.68

EPS 42.78 42.53 20.35 43.72 49.94

% change in EBIT 4% 7% -3% -1% N.A.

% change in sales 24% -9% 22% 14% N.A.

% change in EPS 1% 109% -53% -12% N.A.

Degree of Operating

Leverage 0.17 -0.71 -0.14 -0.07 N.A.

Degree of Financial Leverage 0.15 16.73 17.51 13.34 N.A.

Degree of Total Leverage 0.02 -11.88 -2.47 -0.88 N.A.


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DOL

A type of leverage ratio summarizing the effect a particular amount of operating leverage has on a company's earnings before interest and taxes (EBIT).

Operating leverage involves using a large proportion of fixed costs to variable costs in the operations of the firm. The higher the degree of operating

leverage, the more volatile the EBIT figure will be relative to a given change in sales, all other things remaining the same.

For BPCL, after measuring DOL at various levels of output, where theoretically DOL is undefined at operating breakeven point. DOL is negative from

2008 to 2010; this means that it is less than its operating breakeven point.. (This does not imply that an increase in Q (sales) will lead to a decrease in

EBIT). However, DOL is positive in rest of the years i.e. is greater than operating breakeven point. A large or positive DOL means increase in level of

output will increase the level of operating income; means small fluctuations in output will produce large fluctuations in operating income.

DF L

A leverage ratio summarizing the affect a particular amount of financial leverage has on a company's earnings per share (EPS). Financial leverage

involves using fixed costs to finance the firm, and will include higher expenses before interest and taxes (EBIT). The higher the degree of financial

leverage, the more volatile EPS will be, all other things remaining the same. Each level of EBIT has a different DFL. DFL is undefined at financial

breakeven point. BPCL is in good position.

DTL

By combining the degree of operating leverage with the degree of financial leverage we obtain the degree of total leverage (DTL). If a firm has a high

amount of operating leverage and financial leverage, a small change in sales will lead to a large variability in EPS or we can say that it is the percentagechange in net income that is associated with a given percentage change in sales.

Investing in BPCL is a good option


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Du Pont Analysis

The system identifies profitability as being impacted by three different levels:

1. Earnings & efficiency in earnings- EARNINGS

2. Ability of your assets to be turned into profits- TURNINGS

3. Financial leverage- LEVERAGE

This analysis technique is called the "DuPont Formula". The DuPont Formula shows the interrelationship between key financial ratios.

Profit After Tax / Profit Before Tax (tax burden)

Profit Before Tax / Profit Before Interest Tax (interest burden)

Profit Before Interest Tax / Sales (operating efficiency)

Sales / Assets (Asset t/o)

Assets / Equity (leverage)

By using the DuPont equation, an analyst can easily determine what processes the company does well and what processes can be improved.

Interest burden is high than we have to check the Debt is proper utilized in a company.

Operating efficiency says that efficiency of the company controlling the cost and expenses associated with the business.

Asset turnover ratio measures the efficiency with which a company deploys its assets to generate the sales.

Furthermore, ROE represents the profitability of funds invested by the owners of the firm.


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Particulars \ Year 2011 2010 2009 2008 2007

Net Sales 150900.85 121764.71 134062.94 110208.13 96556.85

PBDIT 5,167.33 4,617.82 4,244.61 4,367.07 4,203.79

Other Written Off 0 0 0 0 0

Depreciation 1,655.40 1,242.32 1,075.53 1,098.21 904.11

PBIT 3,511.93 3,375.50 3,169.08 3,268.86 3,299.68

Interest 1100.78 1010.95 2166.37 672.47 532.69

PBT 2411.15 2364.55 1002.71 2596.39 2766.99

Reported Net Profit 1,546.68 1,537.62 735.90 1,580.56 1,805.47

Average Assets 17011.56 16187.1 14003.27 12735.38 11833.39

Equity 14057.62 13086.71 12128.11 11676.83 10273.54

PAT/PBT(taxburden) 0.641469838 0.65028018 0.733911101 0.608752922 0.652503

PBT/PBIT(int burden) 0.686559812 0.700503629 0.31640413 0.794279963 0.838563

PBIT/Sales(ope eff) 0.023273096 0.027721497 0.023638748 0.029660788 0.034173

Sales/Assets(aseet t/o) 8.870488656 7.522330127 9.573688146 8.653697809 8.159695

Assets/Equity(leverage) 1.210130876 1.23691134 1.154612714 1.090653885 1.151832

Return On Equity

(ROE) 0.110024314 0.117494771 0.06067722 0.135358655 0.17574


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PAT/PBT

2011 2010 2009 2008 2007

0.64146984 0.65028018 0.733911101 0.608752922 0.652503262

PBT/PBIT

2011 2010 2009 2008 2007

0.68655981 0.70050363 0.31640413 0.794279963 0.838563133


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External Fund Requirement

Balance Sheet

(Rs in Crs)

Year Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12

SOURCES OF FUNDS :

Share Capital 361.54 361.54 361.54 361.54 361.54 361.54

Reserves Total 9,912.00 11,315.30 11,766.57 12,725.17 13,696.08 15339.61

Equity Share Warrants 0 0 0 0 0

Equity Application Money 0 0 0 0 0

Total Shareholders Funds 10,273.54 11,676.84 12,128.11 13,086.71 14,057.62 15701.15

Minority Interest 0 0 0 0 0

Secured Loans 2,593.96 2,730.21 3,661.60 10,443.87 4,033.10

Unsecured Loans 8,235.28 12,292.17 17,509.81 11,751.33 14,938.77

Total Debt 10,829.24 15,022.38 21,171.41 22,195.20 18,971.87 21248.49


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Total Liabilities 21,102.78 26,699.22 33,299.52 35,281.91 33,029.49 36949.64

APPLICATION OF FUNDS :

Gross Block 19,457.58 21,500.93 22,522.33 25,412.52 29,334.23 32854.34

Less : Accumulated Depreciation 8,476.53 9,532.26 10,556.54 11,743.17 13,334.90 0.4546 14935.09

Less:Impairment of Assets 0 0 0 0 0

Net Block 371.82 420.91 499.83 646.64 1,498.70 17919.25

Lease Adjustment 0 0 0 0 0

Capital Work in Progress 852.34 766.71 2,037.48 2,517.75 1,012.23 2024.58

Investments 8,294.90 10,318.21 18,078.38 13,501.33 11,377.96 12743.32

Current Assets, Loans & Advances

Inventories 8,661.26 10,603.84 6,823.92 12,028.86 15,375.08 17220.09

Sundry Debtors 1,518.73 1,608.61 1,425.67 2,662.68 2,664.42 2984.15

Cash and Bank 863.97 961.59 441.55 342.36 379.97 425.57

Loans and Advances 2,586.90 6,533.32 6,597.28 8,550.03 9,186.36 10288.72


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Total Current Assets 13,630.86 19,707.36 15,288.42 23,583.93 27,605.83 30918.53

Less : Current Liabilities and Provisions

Current Liabilities 11,273.78 14,580.37 12,831.31 17,131.15 21,958.32 24593.32

Provisions 1,073.16 986.26 1,712.44 2,580.59 3,170.03 3550.43

Total Current Liabilities 12,346.94 15,566.63 14,543.75 19,711.74 25,128.35 28143.75

Net Current Assets 5,647.51 6,452.78 2,457.11 6,452.78 5,647.51 2774.78

Miscellaneous Expenses not written off

Deferred Tax Assets 298.16 303.87 623.57 1,044.18 1,052.66

Deferred Tax Liability 1,680.75 1,785.24 1,862.81 1,903.48 2,060.20

Net Deferred Tax -1,382.59 -1,481.37 -1,239.24 -859.3 -1,007.54 -1128.44

Total Assets 21,102.78 26,699.21 33,299.52 35,281.91 33,029.49

Contingent Liabilities 2,810.81 3,075.10 3,775.80 8,082.44 9,138.96

ToatlAssets 63605.67

Total Liabilities 63964.95

EFR -359.28


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Total EFR for BPCL is approx. Rs -359.28cr. In forecasting the next year sales, the share capital is kept constant. As the total

sales expectation for the year 2012 is resulting it to be negative, therefore, a growth of 12% is considered here. The company

should go for the equity route as further debt would increase the companys liability and would need more cash in order to serve

that debts interest. JSW Steel reputation is high in the market and can draw cash at low cost (ke). One of the reason that company

should go for the equity route because the company have 16474.64cr of debt and further debt would increase the cost of raising it.

If the company continues with its present debt with interest rate of 14.30%. As the company is already having high debt and

raising the further debt would cost more i.e. kd would be high because investor loses confidence in the company.


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COMPARATIVE STATEMENTS

Comparative Balance Sheet

2011 2010 Change Per Cent Change 2010 2009 Change PerCent Change

Liabilities and Capital

Current Liabilities 18788.29 14550.56 4237.73 29.12417117 14550.56 11118.87 3431.69 30.86365791

Long-term liabilities 18971.87 22195.2 -3223.33 -14.52264454 22195.2 21171.41 1023.79 4.835719492

Share Capital 361.54 361.54 0 0 361.54 361.54 0 0

Reserves 13696.08 12725.17 970.91 7.62983913 12725.17 11766.57 958.6 8.146809138

Total 51817.78 49832.47 1985.31 3.983968685 49832.47 44418.39 5414.08 12.18882539

Assets

Current Assets 27605.83 23583.93 4021.9 17.05356147 23583.93 15288.42 8295.51 54.26008705

Net Fixed Assets 15999.33 13669.35 2329.98 17.04528745 13669.35 11965.79 1703.56 14.23692042

Other Assets 0 0 0 0 0 0 0 0

Total 43605.16 37253.28 6351.88 17.05052548 37253.28 27254.21 9999.07 36.68816671

Comparative Financial Statement analysis provides information to assess the direction of change in the business. Financial statements arepresented as on a particular date for a particular period. The financial statement Balance Sheet indicates the financial position as at the end of anaccounting period . But financial managers and top management are also interested in knowing whether the business is moving in a favourable or anunfavourable direction. For this purpose, figures of current year have to be compared with those of the previous years. In analyzing this way,comparative financial statements are prepared.


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Comparative Financial Statement Analysis is also called as Horizontal analysis. The Comparative Financial Statement provides information abouttwo or more years' figures as well as any increase or decrease from the previous year's figure and it's percentage of increase or decrease. This kind ofanalysis helps in identifying the major improvements and weaknesses.

In this we can see that there has been a negative change in long term liabilities in year 2010-11 whereas, it was positive in year 2009-10, whichimplies that company has taken less debt and hence is less leveraged. Also reserves are less in current year which shows that the reserves have been usedeither in paying off more dividend or other financing options available for the company.

Also current assets are reduced drastically from 54% to 17%, which means that accounts receivables are collected more and the company is moreliquid in the current situation.

COMMON-SIZE STATEMENT

Profit & Loss Account

Mar '11 % as sales turnover Mar '10 % as sales turnover

12 mths 12 mths

(in crores) (in crores)

Income

Sales Turnover 163218.21 100% 131499.72 100%

Excise Duty 12317 7.55% 9735.01 7.40%

Net Sales 150900.85 92.45% 121764.71 92.60%

Other Income 1754.97 1.08% 2240.24 1.70%

Stock Adjustments 1993.38 1.22% 3772.45 2.87%Total Income 154649.2 94.75% 127777.4 97.17%

Expenditure 0.00% 0.00%

Raw Materials 140835.5 86.29% 115001.66 87.45%

Power & Fuel Cost 475.89 0.29% 237.12 0.18%

Employee Cost 2800.49 1.72% 2139.63 1.63%


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Other Manufacturing Expenses 870.31 0.53% 838.11 0.64%

Selling and Admin Expenses 3218.33 1.97% 3025.23 2.30%

Miscellaneous Expenses 1281.35 0.79% 1917.83 1.46%

Preoperative Exp Capitalised 0 0.00% 0 0.00%

Total Expenses 149481.87 91.58% 123159.58 93.66%

Mar '11 Mar '10

12 mths 12 mths

0.00% 0.00%

Operating Profit 5167.33 3.17% 4617.82 3.51%

Interest 1100.78 0.67% 1010.95 0.77%

PBDT 4066.55 2.49% 3606.87 2.74%

Depreciation 1655.4 1.01% 1242.32 0.94%

Profit Before Tax 2411.15 1.48% 2364.55 1.80%

Extra-ordinary items -131.8 -0.08% -113.71 -0.09%

PBT (Post Extra-ord Items) 2542.95 1.56% 2478.26 1.88%

Tax 716.23 0.44% 1130.18 0.86%

Reported Net Profit 1546.68 0.95% 1537.62 1.17%

Dividend 506.16 0.31% 506.16 0.38%

Preference Dividend 0 0.00% 0 0.00%

Earning Per Share (Rs) 40.81 0.03% 40.52 0.03%

Equity Dividend (%) 140 0.09% 140 0.11%

Book Value (Rs) 388.83 0.24% 361.97 0.28%


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Balance Sheet

Mar '11 as % of total liabilities Mar '10 as % of total liabilities

12 mths 12 mths

(in crores) (in crores)

Sources Of Funds

Equity Share Capital 361.54 1.09% 361.54 1.02%

Share Application Money 0 0.00% 0 0.00%

Preference Share Capital 0 0.00% 0 0.00%

Reserves 13696.08 41.47% 12725.17 36.07%

Networth 14057.62 42.56% 13086.71 37.09%

Secured Loans 4033.1 12.21% 10443.87 29.60%

Unsecured Loans 14938.77 45.23% 11751.33 33.31%

Total Debt 18971.87 57.44% 22195.2 62.91%

Total Liabilities 33029.49 100% 35281.91 100%

Mar '11 Mar '10

12 mths 12 mths

Application Of Funds

Gross Block 29334.23 88.81% 25412.52 72.03%

Less: Accum. Depreciation 13334.9 40.37% 11743.17 33.28%

Net Block 15999.33 48.44% 13669.35 38.74%

Capital Work in Progress 1012.23 3.06% 2517.75 7.14%

Investments 11377.96 34.45% 13501.33 38.27%

Inventories 15375.08 46.55% 12028.86 34.09%

Sundry Debtors 2664.42 8.07% 2662.68 7.55%

Cash and Bank Balance 379.97 1.15% 242.36 0.69%

Total Current Assets 27605.83 83.58% 23583.93 66.84%


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Loans and Advances 9186.36 27.81% 8550.03 24.23%

Total CA, Loans & Advances 36792.19 111.39% 32133.96 91.08%

Deffered Credit 2060.2 6.24% 1903.48 5.40%

Current Liabilities 18788.29 56.88% 14550.56 41.24%

Provisions 3170.03 9.60% 2580.59 7.31%

Total CL & Provisions 21958.32 66.48% 17131.15 48.56%Net Current Assets 5647.51 17.10% 6452.78 18.29%

Miscellaneous Expenses 0 0.00% 0 0.00%

Total Assets 33029.49 100.00% 35281.91 100.00%

0.00% 0.00%

Contingent Liabilities 9138.96 27.67% 8082.44 22.91%

Common Size Income Statement:

In common size statements the sales figure is taken as 100 and all other figures of cost & expenses are expressed as percentage to sales. when other costs & expenses

are reduced from sales figure of 100, the balance in figure is taken as net profit. This reveals the efficiency of the firm in generating revenue which leads to

profitability.

Thus from our common size income statement we can interpret that although our operating profit has been increased from 4617.82 to 5167.33 but the profit profit

margin has decreased from 3.51% to 3.17%. This reveals that the firm is not efficient in generation the revenues.


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Common size Balance Sheet:

Common size balance sheet reveals the proportion of fixed assets to current assets, composition of fixed assets and current assets, proportion of long term funds to

current liabilities and provisions , composition of current liabilities etc. It highlights the long term health and solvency , ability to meet short term obligation and

liquidity position of the enterprise.

Production has increased because of increase in investment in fixed Assets and Raw material which has increased the overall productivity thus increases the overallprofit from 4617.82 to 5167.33

Company has improved its financial position since it has maintained the same equity level and reduced the total debt.

The company return on equity has decreased from 0.117 to 0.110.


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WORKING CAPITAL

2011 2010 2009 2008 2007

1 Raw material conversion period

Raw material consumption 139572.16 113775.3 124043 99286.15 89147.96

Raw material consumption per day 388 316 345 276 248

Raw material inventory 4009.33 2745.99 1519.63 3757.88 1457.47

Raw material inventory holding days 10 9 4 14 6

2 Work-in-process conversion period

Cost of production 145066.18 116747.5 126849.4 101166.2 90788.44

Cost of production per day 403 324 352 281 252

Work-in-process inventory 1031.25 728.18 485.52 565.92 479


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work in process inventory holding days 3 2 1 2 2

3 Finished Goods conversion period

Cost of goods sold 143318.2 112995.3 128344.9 101645.6 90598.58

Cost of goods sold per day 398 314 357 282 252

Finished goods inventory 10131.47 8383.49 4631.3 6126.78 6606.19

Finished goods inventory holding day 25 27 13 22 26

4 Collection Period

Credit sales 1,47,817.88 117938.4 133605.8 105061.4 93659.74

Sales per day 411 328 371 292 260

Debtors 2664.42 2662.68 1425.67 1608.61 1518.73

Debtors outstanding days 6 8 4 6 6

5 Creditors Deferral Period

Credit purchases 140835.5 115001.7 121804.7 101586.6 88593.77


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Purchases per day 391 319 338 282 246

Creditors 10939.47 8359.97 6214.58 8651.35 5958.71

Creditors outstanding days 28 26 18 31 24

Gross Operating Cycle

1 Inventory Conversion Period

raw material

work-in -process

finished goods

38 38 19 37 34

2 Debtors collection period 6 8 4 6 6

3 Gross Operating Cycle 44 46 23 43 40

4 Creditors Payment Period 28 26 18 31 24

5 Net Operating cycle 16 20 5 12 16

Raw material Conversion


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Raw material conversion period was lowest in the year 2009, i.e. of 4 days as compared to other years. Whereas in 2008, it was of 14 days, this means

that the company was able to manage its total cost in maintaining the inventory, which includes carrying cost, ordering cost, and the cost occurred due to

obscolecense and we can easily say that, the company could easily manage ita raw material conversion period.

Work-in-process

The least work-in-process period was in year 2009 this means that the company ws very efficient in utilising its raw material in the manufacturing

process. Since, the highest no.of days are in the year 2011, so the company needs to look after the following issues like techonological revamping

increase investment ,adding in capacity, etc.

Finished goods

The conversion period was lowest in the year 2009, i.e. 13 days and maximum in the year 2010, i.e.27 days it means 2009 was best as Fixed Goods were

easily converted into sales which shows that the company was efficient in forecasting its projected demand and to have adequate inventory with them so

as not to loose customers to competitors. This also shows that the inventory conversion period was also as company could easily generate sales. One

reason could be a conscious policy decision to avoid stock out situation and carrying more finished good inventory to expand sales.

Debtor collection

In 2009, the debtor collection period was of 4 days, which is lowest as compared to the other 4 years. From this we can conclude that that the company

have enough liquidity with it as it will easily receive its account receivables and can use it somewhere else. In 2010, it was maximum of 8 days, i.e. cash

was reliased a little later which can cause a problem in the working capital management of the company.

Creditors Collection Period


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It was minimum in 2009, i.e. 18 days and max. In 2008 , i.e. of 31 days. For a company, large collection period is preferable as we have to pay after long

period of time and we can have the liquidity for larger period.

Inventory Conversion period

The lesser the inventory conversion period, the more its good for the company as it saves costs on number of factors and we can see that in 2009, it was

minimum of 19 days as compared to 31 days in 2011. This shows that company could easily manage its operation in 2010.

Net Operating cycle

Net Operating cycle was lowest in the year 2009 which means that the company was doing fairly well even by locking up of less inventory which is a

good cost cutting measure. Thus improvising their operations reducing cost of production and ultimately having a competitive edge.


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ANNEXURS


12

months12 months 12 months 12 months 12 months

Sources Of Funds

Total Share Capital 361.54 361.54 361.54 361.54 361.54

Equity Share Capital 361.54 361.54 361.54 361.54 361.54

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 13,696.08 12,725.17 11,766.57 11,315.30 9,912.00

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 14,057.62 13,086.71 12,128.11 11,676.84 10,273.54

Secured Loans 4,033.10 10,443.87 3,661.60 2,730.21 2,593.96

Unsecured Loans 14,938.77 11,751.33 17,509.81 12,292.17 8,235.28

Total Debt 18,971.87 22,195.20 21,171.41 15,022.38 10,829.24

Total Liabilities 33,029.49 35,281.91 33,299.52 26,699.22 21,102.78


12 mths 12 mths 12 mths 12 mths 12 mths

Balance Sheet of Bharat Petroleum

Corporation

------------------- in Rs. Cr. -------------------


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Application Of Funds

Gross Block 29,334.23 25,412.52 22,522.33 21,500.93 19,457.58

Less: Accum. Depreciation 13,334.90 11,743.17 10,556.54 9,532.26 8,476.53

Net Block 15,999.33 13,669.35 11,965.79 11,968.67 10,981.05

Capital Work in Progress 1,012.23 2,517.75 2,037.48 766.71 852.34

Investments 11,377.96 12,201.32 16,715.19 9,358.01 7,385.42

Inventories 15,375.08 12,028.86 6,823.92 10,603.84 8,661.26

Sundry Debtors 2,664.42 2,662.68 1,425.67 1,608.61 1,518.73

Cash and Bank Balance 379.03 341.43 440.62 960.67 863.05

Total Current Assets 18,418.53 15,032.97 8,690.21 13,173.12 11,043.04

Loans and Advances 10,239.02 10,894.22 8,584.04 7,797.30 3,797.44

Fixed Deposits 0.94 0.93 0.93 0.92 0.91

Total CA, Loans & Advances 28,658.49 25,928.12 17,275.18 20,971.34 14,841.39Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 20,848.49 16,454.04 12,981.68 15,379.36 11,881.37

Provisions 3,170.03 2,580.59 1,712.44 986.15 1,076.07

Total CL & Provisions 24,018.52 19,034.63 14,694.12 16,365.51 12,957.44

Net Current Assets 4,639.97 6,893.49 2,581.06 4,605.83 1,883.95

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 33,029.49 35,281.91 33,299.52 26,699.22 21,102.76Contingent Liabilities 9,943.94 9,382.97 5,862.61 5,083.23 3,590.62

Book Value (Rs) 388.82 361.97 335.45 322.97 284.16


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Profit & Loss account of Bharat Petroleum Corporation ------------------- in Rs. Cr. -------------------


12 months 12 months 12 months 12 months 12 months

Income

Sales Turnover 163,218.36 131,499.81 145,392.07 121,684.07 107,452.27

Excise Duty 12,380.03 11,282.73 11,318.64 11,475.94 10,895.42

Net Sales 150,838.33 120,217.08 134,073.43 110,208.13 96,556.85

Other Income 1,321.04 1,190.10 -298.74 1,091.63 550.99

Stock Adjustments 2,056.05 3,989.85 -1,575.88 -392.50 205.45

Total Income 154,215.42 125,397.03 132,198.81 110,907.26 97,313.29

Expenditure

Raw Materials 141,028.03 113,884.03 121,991.29 101,743.99 88,745.19

Power & Fuel Cost 475.89 237.12 67.17 61.75 66.64

Employee Cost 2,802.85 2,141.12 1,884.88 1,297.21 1,003.70

Other Manufacturing Expenses 410.13 384.72 347.09 229.54 243.43

Selling and Admin Expenses 3,331.54 3,186.95 2,870.03 2,508.57 2,365.31

Miscellaneous Expenses 1,335.33 888.34 796.46 823.61 620.23

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00


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Total Expenses 149,383.77 120,722.28 127,956.92 106,664.67 93,044.50



Operating Profit 3,510.61 3,484.65 4,540.63 3,150.96 3,717.80

PBDIT 4,831.65 4,674.75 4,241.89 4,242.59 4,268.79

Interest 1,100.78 1,010.95 2,166.37 672.47 477.35

PBDT 3,730.87 3,663.80 2,075.52 3,570.12 3,791.44

Depreciation 1,655.40 1,242.32 1,075.53 1,098.21 904.11

Other Written Off 0.00 0.00 0.00 0.00 0.00

Profit Before Tax 2,075.47 2,421.48 999.99 2,471.91 2,887.33

Extra-ordinary items 247.45 -60.11 -2.97 118.65 -126.50

PBT (Post Extra-ord Items) 2,322.92 2,361.37 997.02 2,590.56 2,760.83

Tax 776.24 823.75 261.12 1,010.00 955.33

Reported Net Profit 1,546.68 1,537.62 735.90 1,580.56 1,805.48

Total Value Addition 8,355.74 6,838.25 5,965.63 4,920.68 4,299.32

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 506.16 506.16 253.08 144.62 578.47

Corporate Dividend Tax 71.08 72.77 31.45 9.16 91.87

Per share data (annualised)

Shares in issue (lakhs) 3,615.42 3,615.42 3,615.42 3,615.42 3,615.42Earning Per Share (Rs) 42.78 42.53 20.35 43.72 49.94

Equity Dividend (%) 140.00 140.00 70.00 40.00 160.00

Book Value (Rs) 388.82 361.97 335.45 322.97 284.16


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Cash Flow of Bharat Petroleum

Corporation------------------- in Rs. Cr. -------------------



Net Profit Before Tax 2422.74 2421.48 1017.57 2471.91 2887.95

Net Cash From Operating Activities 4206.31 -1515.15 6212.34 417.13 4646.65

Net Cash (used in)/fromInvesting Activities

627.00 1538.43 -9908.75 -3553.95 -5899.60

Net Cash (used in)/from Financing Activities -1817.00 652.09 -2285.32 -197.74 -323.65

Net (decrease)/increase In Cash and Cash Equivalents 3016.31 675.37 -5981.73 -3334.56 -1576.59

Opening Cash & Cash Equivalents -16446.03 -17121.40 -11139.67 -7805.11 -6228.52

Closing Cash & Cash Equivalents -13429.72 -16446.03 -17121.40 -11139.67 -7805.11


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BIBLIOGRAPHY

Annual Report of BPCL

www.Moneycontrol.com

www.Wikipedia.com

http://www.oilrefiniries.com

www.capitaline.com

Corporate Finance by Ross Westerfield Jess

bpcl fience

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