Professional Documents
Culture Documents
Devangana Arora
GMP-17-15
1. What are the objectives of Financial Statements?
b. Balance Sheet: The Balance sheet shows what a business owes and owns.
What the business owes is shown on the balance sheet as liabilities and what
it owns is shown as assets. Thus, the balance sheet shows the financial
position of a company at any point of time. It gives information about the
shareholders equity, giving the net worth of the company and also helps the
firm to make provisions against future losses.
3. What are the contents of Directors Report and MD&A? How are
they useful?
Directors Report:
The Directors report is a statement by a company's directors, as part of the
annual consolidated reports, giving the directors' opinion of the state of the
company, and how much should be paid to people owning shares in the
company.
In case of BPCL, their capital reserve reported in 2015-16 was Rs. 12.33 Cr.
This resulted from a profit reported in the previous years. The creation of this
surplus is traced back by analysing the data for past 5 years.
Reserves are any part of stockholders' equity, except for basic share capital.
Reserves are retained in the business and not distributed to owners or
shareholders.
Movement in Reserves of BPCL in the past 5 years are represented in the table
below:
Period
Type of Reserve 2011-12 2012-13 2013-14 2014-15 2015-16
Capital Reserve 16.15 16.27 12.33 12.33 12.33
Capital Grant 0 0 9.37 12.05 10.12
Debenture Reserve 1000 126.3 323.14 517.49 586.24
General Reserve 13036.17 15,268.37 17706.59 20675.54 25406.12
Foreign Currency
Monetary Item 0 0 184.25 26.99 (79.2)
Translation Difference
Account
2
0.00 0.00
0
2011-12 2012-13 2013-14 2014-15 2015-16
Debenture Reserve (in Cr.)
1200
1,000.00
1000
800
586.24
600 517.49
400 323.14
126.30
200
0
2011-12 2012-13 2013-14 2014-15 2015-16
10000
5000
0
2011-12 2012-13 2013-14 2014-15 2015-16
150
100
26.99
50
0.00 0.00
0
2011-12 2012-13 2013-14 2014-15 2015-16
-50 (79.20)
-100
6. What is the background of the loan given by the Government
to the Oil industry?
As per the mandate given by Oil Industry Development Act of 1974, OIDB (Oil
Industry Development Board) provides financial and other assistance for the
development of Oil Industry. The development includes many activities such as
prospecting or exploring for or production of mineral oil, refining, processing,
transportation, storage, handling and marketing, etc. So, OIDB has been
provisioning loans to to all PSUs since its inception in 1974.
The quantum of loan disbursed by OIDB has increased from Rs 16.01 crore in
1974-75 to an average of about Rs 1900 crores during the recent years. GAIL,
IOC, HPCL, BPCL and MRPL are the major beneficiaries of the loans released
by OIDB. The loan has been primarily utilised to fund gas and oil pipeline
projects, setting up of new refineries and quality improvement of existing
refineries, single point mooring projects and city gas distribution projects
The Redeemable Debentures of BPCL show the following trend in the last 5
years:
Period
Account 2011-12 2012-13 2013-14 2014-15 2015-16
Debenture
1000 126.3 323.14 517.49 586.24
Redemption Reserve
Debenture Redemption Reserve (in Cr.)
1200
1,000.00
1000
800
586.24
600 517.49
400 323.14
126.30
200
0
2011-12 2012-13 2013-14 2014-15 2015-16