BPCL Accounting Policy


The financial statements of the Corporation have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Corporation has prepared these financial statements
to comply in all material respects with the accounting standards
prescribed under Section 133 of the Companies Act, 2013 (''''Act'''') read
with Rule (7) of the Companies (Accounts) Rules, 2014 and other
provisions of the Act (to the extent notified). The financial
statements have been prepared on an accrual basis (unless otherwise
stated) and under historical cost convention. The accounting policies
are consistent with those used in previous year except for the policy
in respect of capitalization of fixed bed catalysts referred to in para
1.2.1(c), the depreciation of Fixed Assets referred to in para
1.5.1(b), (c), (d) and (f) and valuation of inventory referred to in
para 1.7.1.


The preparation of financial statements requires the Management of the
Corporation to make certain estimates and assumptions that affect the
amounts reported in the financial statements and notes thereto.
Differences, if any, between actual amounts and estimates are
recognised in the period in which the outcome is known.



a) Fixed Assets are stated at cost net of accumulated depreciation.

b) Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.

c) First time procurement cost of fixed bed catalyst is capitalized as
a separate ''''component'''' in the respective Plant and Equipment.

d) Expenditure on assets, other than plant and machinery, LPG cylinders
and pressure regulators, not exceeding Rs. 1,000 per item are charged
to revenue.

e) Machinery spares that are specific to a fixed asset are capitalised
along with the fixed asset. Replacement of such spares is charged to

f) Land acquired on lease where period of lease exceeds 99 years is
treated as freehold land.

g) Land acquired on lease for 99 years or less is treated as leasehold

h) Expenditure during construction period: Direct expenses including
borrowing cost incurred during construction period on capital projects
are capitalised. Indirect expenses of the project group which are
allocated to projects costing Rs. 5 crores and above are also
capitalised. Crop compensation expenses incurred in the process of
laying pipelines are capitalised as part of pipeline cost. Expenditure
incurred during construction period on projects like electricity
transmission lines, roads, culverts etc. the ownership of which is not
with the Corporation are charged to revenue in the accounting period of
incurrence of such expenditure.


a) Intangible assets are carried at cost less accumulated amortization.

b) Cost of Right of Way which is perpetual and absolute in nature is
amortised over a period of 99 years and in other cases, over its
estimated useful life.

c) Expenditure incurred for creating/acquiring other intangible assets
of Rs. 0.50 Crore and above, from which future economic benefits will
flow over a period of time, is amortised over the estimated useful life
of the asset or five years, whichever is lower, from the time the
intangible asset starts providing the economic benefit. In other cases,
the expenditure is charged to revenue in the year the expenditure is


The values of tangible and intangible assets of respective Cash
Generating Units are reviewed by the management for impairment at each
Balance Sheet date, if events or circumstances indicate that the
carrying values may not be recoverable. If the carrying value is more
than higher of net selling price of the asset or present value of
estimated future cash flows, the difference is recognized as an
impairment loss.


Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as a part of the cost
of such assets till the month in which the asset is ready for use. All
other borrowing costs are charged to revenue.


1.5.1. Depreciation on fixed assets is provided on the straight line
basis, over the useful lives of assets (after retaining the residual
value of upto 5%) as prescribed by the Schedule II of the Act, except
in following cases:

a) Cost of leasehold land for lease period not exceeding 99 years, is
amortised over the period of lease. Plant & Machinery at Retail Outlets
(other than Storage tanks and related equipments) are depreciated over
a useful life of 15 years based on the technical assessment.

b) Computer equipments are depreciated over a period of 4 years and
Mobile phones are depreciated over a period of 2 years (previously 3
years) based on internal assessment. Furniture, other than computer
equipments and mobile phones, provided at the residence of management
staff are depreciated over a period of 7 years as per internal

c) Solar Panels are depreciated over a period of 25 years based on the
technical assessment of useful life and applicable warranty conditions.

d) Moulds, used for the manufacturing of the packaging material for
Lubricants, are depreciated over a period of 5 years based on technical
assessment of useful life.

e) Fixed assets costing not more than Rs. 5,000 each are depreciated @
100 percent in the year of acquisition except LPG Cylinders and
Pressure Regulators which are depreciated over a useful life of 15
years based on the technical assessment.

f) Components of the main asset that are significant in value and have
different useful lives as compared to the main asset are depreciated
over their estimated useful life. Useful life for such components has
been assessed based on historical experience and internal technical

1.5.2. Depreciation is charged on additions/deletions on pro-rata
monthly basis including the month of addition/ deletion.


1.6.1. Current investments are valued at lower of cost or fair value
determined on an individual investment basis.

1.6.2. Long-term investments are valued at cost. Provision for
diminution in value is made to recognise a decline, other than of
temporary nature, in the value of such investments.


1.7.1 Inventories are stated at cost or net realisable value, whichever
is lower. Cost of inventories comprises of expenditure incurred in the
normal course of business in bringing inventories to their present
location including appropriate overheads apportioned on a reasonable
and consistent basis and are determined on the following basis:

a) Crude oil, traded goods and finished products other than lubricants
are determined on First in First out basis

b) Other raw materials, packages, lubricants and stores and spares are
determined on weighted average basis.

c) The cost of Stock-in-Process is determined at raw material cost plus
cost of conversion.

1.7.2. The net realisable value of finished goods and stock in trade
are based on the inter-company transfer prices and final selling prices
(applicable at the location of stock) for sale to oil companies and
retail consumers respectively. For the purpose of stock valuation, the
proportion of sales to oil companies and retail sales are determined on
all India basis and considered for stock valuation at all locations.

1.7.3. Obsolete, slow moving, surplus and defective stocks are
identified at the time of physical verification of stocks and where
necessary, provision is made for such stocks.


1.8.1. Revenue is recognised when, sufficient risks and rewards
incidental to ownership are transferred to the customer, it can be
reliably measured and it is reasonable to expect ultimate collection.

1.8.2. Sales represents invoiced value of goods supplied net of trade
discounts, and include applicable excise duty, surcharge and other
elements as are allowed to be recovered as part of the price but
excludes VAT/ Sales Tax. Further, it includes other elements allowed by
the Government from time to time.

1.8.3. Claims including subsidy on LPG and SKO from Government of
India are booked on in principle acceptance thereof on the basis of
available instructions/clarifications subject to final adjustments
after necessary audit, as stipulated.

1.8.4. Other claims are booked when there is a reasonable certainty of

1.8.5. Income from sale of scrap is accounted for on realization.

1.8.6. Dividend income is recognized when the Corporation''''s right to
receive the dividend is established.

1.8.7. Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable interest rate.


1.9.1. Expenditure on Research, other than capital expenditure, is
charged to revenue in the year in which the expenditure is incurred.

1.9.2. Income/expenditure upto Rs. 0.05 crore in each case pertaining
to prior year(s) is charged to the current year.

1.9.3. Prepaid expenses upto Rs. 0.05 crore in each case, are charged
to revenue as and when incurred.

1.9.4. Deposits placed with Government agencies/local authorities
which are perpetual in nature are charged to revenue in the year of


1.10.1. Contributions to defined contribution schemes such as Pension,
Superannuation, Provident Fund, etc. are charged to the Statement of
Profit and Loss as and when incurred.

1.10.2. The Corporation also provides for retirement/post-retirement
benefits in the form of gratuity, leave encashment, post-retirement
benefits and other long-term benefits. Such defined benefits are
charged to the Statement of Profit and Loss based on valuations made by
independent actuary using the Projected Unit Credit Method, as at the
Balance Sheet date.

1.10.3. Expenditure on account of Voluntary Retirement Scheme are
charged to Statement of Profit and Loss as and when incurred.


1.11.1. Customs duty on Raw materials/Finished goods lying in bonded
warehouse are provided for at the applicable rates except where
liability to pay duty is transferred to consignee.

1.11.2. Excise duty on finished stocks lying at manufacturing locations
is provided for at the assessable value applicable at each of the
locations based on end use.


1.12.1. Transactions in foreign currency are accounted in the reporting
currency at the exchange rate prevailing on the date of transaction.

1.12.2. Monetary items denominated in foreign currency are converted at
exchange rates prevailing on the date of Balance Sheet.

1.12.3. Foreign Exchange differences arising at the time of translation
or settlement are recognised as income or expense in the Statement of
Profit and Loss either as Profit or Loss on Foreign Currency
transactions and translations or Finance Cost, as the case may be.

1.12.4. Foreign exchange differences on long-term foreign currency
monetary items relating to acquisition of depreciable assets are
adjusted to the carrying cost of the assets and depreciated over the
balance life of the asset and in other cases, if any, accumulated in
"Foreign Currency Monetary Item Translation Difference Account" and
amortised over the balance period of the asset or liability.

1.12.5. Premium/discount arising at the inception of the forward
exchange contracts to hedge foreign currency risks are amortised as
expense or income over the life of the contract. Exchange differences
on such contracts are recognised in the Statement of Profit and Loss.

1.12.6. Gains/losses arising on settlement of Derivative transactions
entered into by the Corporation to manage the commodity price risk and
exposures on account of fluctuations in interest rates and foreign
exchange are recognised in the Statement of Profit and Loss. Provision
for losses in respect of outstanding contracts as on Balance Sheet date
is made based on mark to market valuations of such contracts.


1.13.1. When the grant relates to an expense item or depreciable fixed
assets, it is recognized as income over the periods necessary to match
them on a systematic basis to the costs, which it is intended to
compensate. Grants relating to depreciable fixed assets are reflected
as Capital Grants under Reserves & Surplus in Balance Sheet and
recognised in the Statement of Profit and Loss on a systematic and
rational basis over the useful life of the asset.

1.13.2. Government grants of the nature of promoters'''' contribution or
relating to non-depreciable assets are credited to Capital Reserve in
Balance Sheet.


1.14.1. A provision is recognized when the Corporation has a present
obligation as a result of past events; it is probable that an outflow
of resources will be required to settle the obligation and in respect
of which a reliable estimate can be made.

1.14.2. Contingent Liabilities are not recognized but are disclosed in
the Notes. Contingent liabilities are disclosed in respect of possible
obligations that arise from past events but their existence is
confirmed by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the Corporation.

1.14.3. Contingent liabilities and Capital Commitments disclosed are in
respect of items which exceed Rs. 0.05 crore in each case.


1.15.1. Provision for current tax is made after taking into
consideration benefits admissible under the provisions of the Income
Tax Act, 1961.

1.15.2. Deferred tax resulting from "timing differences" between book
and taxable profit is accounted for using the tax rates and laws that
have been enacted or substantively enacted as on the Balance Sheet

1.15.3. Deferred Tax Assets are recognized and carried forward only to
the extent that there is a reasonable certainty that the assets will be
realized in future. However, in respect of unabsorbed depreciation or
carry forward losses, deferred tax asset is recognized and carried
forward only to the extent that there is a virtual certainty that the
assets will be realized in future.

1.15.4. The carrying amount of deferred tax assets and unrecognized
deferred tax assets are reviewed at each Balance Sheet date.


Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends, if any, and attributable taxes) by the
weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effect of all dilutive potential equity shares.


Cash and cash equivalents include cash at bank, cash, cheque and draft
on hand. The Corporation considers all highly liquid investments with a
remaining maturity at the date of purchase of three months or less and
that are readily convertible to known amounts of cash to be cash


All assets and liabilities are classified as current or non-current as
per the Corporation''''s normal operating cycle (determined at 12 months)
and other criteria set out in Schedule III of the Act.


For operating leases, rentals are expensed with reference to lease
terms and other relevant considerations.


Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities are segregated.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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