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Indian Oil Corporation Ltd (IOC) -BSE
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PREV.CLOSE OPEN PRICE HIGH(Rs) LOW(Rs) VOLUME(Rs) 52AVG.RANGE MARKET CAP(Rs.Cr) P/E Div Yield (%) Eps (Rs)
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Directors Report

Dear Members,

It gives me immense pleasure to present the 60th Annual Report and the second Integrated Annual Report of the Corporation for the financial year ended 31st March 2019, along with the Audited Standalone and Consolidated Financial Statements and Auditors' Report thereon on behalf of the Board. During the year, the Corporation continued to achieve excellent performance on all operational parameters in all business verticals, while meeting the energy needs and aspirations of the country.

PERFORMANCE REVIEW

FINANCIAL

Particulars

2018-19

2017-18

US$ Million

Rs in Crore

US$ Million

Rs in Crore

Revenue from Operations

(Inclusive of Excise Duty & Sale of Services)

86,684 6,05,924 78,565 5,06,428
EBITDA

(Profit Before Exceptional Items, Finance Cost, Tax, Depreciation & Amortisation)

5,286 36,952 6,688 43,114
Finance Cost 616 4,311 540 3,483
Depreciation 1,075 7,514 1,096 7,067
Profit Before Tax & Exceptional Items 3,595 25,127 5,052 32,564
Exceptional Items - - - -
Profit Before Tax 3,595 25,127 5,052 32,564
Tax Provision 1,178 8,233 1,740 11,218
Profit After Tax 2,417 16,894 3,312 21,346
Balance Brought Forward from Last Year
Less: Appropriations
Interim Dividend paid 1,112 7,775 1,397 9,005
Final Dividend paid 271 1,896 74 474
Dividend Distribution Tax 284 1,985 298 1,921
Insurance Reserve (Net) 3 18 3 20
Bond Redemption Reserve 90 631 78 503
CSR Reserve (Net) - - - (3)
General Reserve 657 4,589 1,462 9,426
Balance Carried to Next Year - - - -

SHARE VALUE

2018-19

2017-18

US$ US$
Cash Earnings Per Share 0.37 25.85 0.47 29.98
Earnings Per Share 0.26 17.89 0.35 22.52
Book Value Per Share 1.71 118.35 1.78 116.23

Note: Exchange Rate used :-

For 2018-19: Average Rate 1 US$ = D69.90 and Closing Rate 1 US$ = D69.16 as on 31.03.2019 For 2017-18: Average Rate 1 US$ = D64.46 and Closing Rate 1 US$ = D65.18 as on 31.03.2018

PHYSICAL

Particulars 2018-19 2017-18
Refineries Throughput 71.82 69.00
Pipelines Throughput 88.53 85.68
Product Sales (inclusive of Gas, Petrochemicals & Exports) 89.89 88.76

The details of macro-economic, geo-political, financial, industry-specific information affecting the business of the Corporation and the markets in which it operates are provided in the Management Discussion & Analysis, which forms part of the Annual Report

CHANGES IN SHARE CAPITAL / BUYBACK OF SHARES

The Board of your Corporation at its meeting held on 13th December, 2018, had approved a Buyback of not exceeding 29,76,51,006 fully paid-up Equity Shares of face value of Rs 10 each ("Equity Shares") from all the existing shareholders / beneficial owners of equity shares as on the Record Date (25th December, 2018), on proportionate basis, through the "Tender Offer" process at a price of Rs 149/- per equity share, payable in cash for an aggregate consideration not exceeding Rs 4,435 crore. The offer size was 5% of the aggregate of the fully paid-up equity share capital and free reserves and 3.06% of the paid-up equity shares in the total paid- up share capital of the Corporation as per the audited financial statements for the financial year ended 31st March, 2018.

The Buyback Offer opened on 22nd January, 2019 and closed on 4th February, 2019. The settlement of Buyback amount was completed on 12th February, 2019 and 29,76,51,006 Equity Shares were bought back, which were cancelled and extinguished on 14th February, 2019, thereby resulting in reduction of paid-up share capital from Rs 9,711.81 crore to Rs 9,414.16 crore.

DISINVESTMENT BY THE PRESIDENT OF INDIA (PROMOTER)

The promoter of IndianOil, i.e., President of India (PoI), was holding 553,34,36,444 equity shares constituting 56.98% of the total equity share capital as on 1st April, 2018. As part of the Government's disinvestment programme, the PoI, acting through the MoP&NG, sold shares of the Corporation during the year, as per details given below:-

1) In June, 2018, the PoI disinvested 2,18,90,396 equity shares in favour of Bharat 22 ETF (an exchange-traded fund comprising - 22 stocks managed by ICICI Prudential Mutual Fund) whereby the PoI holding reduced to 551,15,46,048 equity shares constituting 56.75% of the paid-up equity share capital of IndianOil.

2) In December, 2018, the PoI further disinvested 26,13,74,221 equity shares in favour of CPSE ETF (an exchange-traded

fund comprising - 11 stocks managed by Reliance Nippon Life Asset Management Company) whereby the PoI holding reduced to 525,01,71,827 equity shares constituting 54.06% of the paid-up equity share capital of IndianOil.

3) In February, 2019, the PoI sold 17,78,54,068 shares under IndianOil's Buyback of Shares, and consequently, the shareholding of PoI reduced to 5,07,23,17,759 equity shares constituting 53.88% of the reduced paid-up equity share capital of IndianOil .

4) In February, 2019, the PoI disinvested 3,72,03,876 equity shares in favour of Bharat 22 ETF whereby the PoI holding further reduced to 503,51,13,883 equity shares constituting 53.48% of the paid-up equity share capital of IndianOil.

5) In March, 2019, the PoI further disinvested 12,29,64,424 equity shares in favour of CPSE ETF, whereby the PoI holding reduced to 491,21,49,459 equity shares constituting 52.18% of the paid-up equity share capital of IndianOil.

DIVIDEND

The Board of Directors of your Corporation has recommended a Anal dividend of 10%, i.e., Rs 1/- per equity share of Rs 10/- each, on the paid-up share capital in addition to the interim dividends totalling to Rs 8.25 per share paid during 2018-19. This is the 52nd consecutive year for which your Corporation has recommended payment of dividend. So far, your Corporation has paid a cumulative dividend of Rs 59,077 crore, excluding the Anal dividend of Rs 941.42 crore recommended for the current year, which is subject to approval by members at the forthcoming AGM on 28th August, 2019. The Anal dividend shall be paid to the members whose names appear in the Register of Members as well as the Beneficial Ownership Position provided by NSDL/CDSL as at the close of 22nd August 2019.

The Board of your Corporation has formulated a Dividend Distribution Policy and the dividends declared/recommended during the year are in accordance with the said policy. The Policy is annexed to the Directors' Report at Annexure-I and is also hosted on the website of the Company, i.e., www.iocl.com

CONTRIBUTION TO EXCHEQUER

Your Corporation has consistently been the largest contributor to the Government exchequer in the form of duties, taxes and dividend. During the year, Rs1,93,422 crore was paid to the exchequer as against Rs1,90,670 crore paid in the previous year. An amount of Rs1,01,395 crore was paid to the Central Exchequer and Rs92,027 crore to the State Exchequer as against Rs1,03,362 crore and Rs87,308 crore paid in the previous year respectively.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Companies Act, 2013 and the Accounting Standards issued by the Institute of Chartered Accountants of India, your Corporation has prepared the Consolidated Financial Statement for the group, including its subsidiaries, joint venture entities and associates. The highlights of the Consolidated Financial Results are as follows:

Particulars

2018-19

2017-18

US$ ' US$ '
Million in Crore Million in Crore
Revenue from Operations
(Inclusive of Excise Duty & Sale of Services) 88,304 6,17,243 79,979 5,15,542
Profit Before Tax 3,709 25,927 5,344 34,450
Profit After Tax 2,471 17,274 3,510 22,626
Less: Share of Minority (15) (103) 68 437
Profit for the Group 2,486 17,377 3,442 22,189

Note: Exchange Rate used:-

For 2018-19: Average Rate 1 US$ = Rs69.90

For 2017-18: Average Rate 1 US$ = Rs64.46

INTERNATIONAL TRADE

In order to meet the crude oil requirement of its refineries, your Corporation imported 61.69 million metric tonnes of crude oil during the year, as against 58.01 million metric tonnes in the previous year. The selection of crude oil is done from a diversified mix of supply sources. The import of petroleum products during the year was 7.00 million metric tonnes as against 6.53 million metric tonnes in the previous year. The Corporation also exported petroleum and petrochemical products during the year. Your Corporation has made alternate arrangements for sourcing of crude oil, including term contracts for US origin crudes, to maintain uninterrupted operations at its refineries and to overcome the crude oil supply concerns due to imposition of sanctions on trade with Iran.

OPERATIONAL PERFORMANCE

Refineries

During the year, the nine refineries of your Corporation performed exceedingly well in physical parameters to achieve the highest ever crude oil throughput of 71.82 million metric tonnes as against 69.00 million metric tonnes in 2017-18. A capacity utilisation of 103.8 per cent was achieved during the year as against 99.7 per cent during 2017-18. The distillate yield of the refineries was 80.4 per cent, same as that of last year. The refineries also achieved excellent energy parameters of Specific Energy Consumption, Energy Intensity Index and Fuel & Loss at 71.3, 97.9 and 8.57 per cent as against 72.6, 98.5 and 8.75 per cent respectively registered for 2017-18.

In order to achieve more flexibility in refining operations, nine new crude oil grades were included in IndianOil's crude oil basket, taking their number to 180. The refineries are well poised to implement projects to rollout BS-VI fuels w.e.f. 01.04.2020 in the entire country as well as to meet the IMO (International Maritime Organisation) 2020 guidelines to reduce the sulphur content in bunker fuel.

Pipelines

Your Corporation has an extensive network of pipelines across the length and breadth of the country for supply of crude oil and products. As on 31.03.2019, the total length of the pipelines was 14,231 km with capacity of 94.16 million tonnes of crude / product pipelines and 21.69 MMSCMD of gas pipelines.

The pipelines of your Corporation achieved the highest ever throughput for the fifth consecutive year, registering a throughput of 88.53 million tonnes as against 85.68 million tonnes in the previous year, registering a growth of 3.3%. The crude oil pipelines achieved a throughput of 51.33 million metric tonnes as against 51.08 million metric tonnes during the previous year. The petroleum product pipelines recorded the highest ever throughput of 37.20 million metric tonnes as against 34.60 million metric tonnes achieved last year, registering a growth of 7.50 per cent. The gas pipelines also achieved the highest ever throughput of 1,834 MMSCM during the year, as against a throughput of 1,683 MMSCM in 2017-18.

Marketing

Your Corporation continued to match the pace of growth in the country and maintained the top place in terms of market share and achieved the highest sales of 79.96 million metric tonnes of petroleum products during the year, as against 77.13 million metric tonnes during the previous year.

During the year, the Corporation commissioned 648 retail outlets (fuel stations, including 335 Kisan Seva Kendra outlets in rural areas) taking their total number to 27,702. All the retails outlets of the Corporation have been automated as on 31st March, 2019. During the year, 5,033 retail outlets were solarised, which is the highest number of retail outlets solarised in a year. Cumulatively, 14,173 retail outlets have been solarised with an installed capacity of about 77 MW. A new initiative, fuel@doorstep was launched during the year to ensure door-to-door delivery of products to specific categories of institutional customers. The Corporation continued to meet the fuel requirement of defence and railways during the year. In order to ensure uninterrupted availability of petroleum products in Leh & Ladakh during winter season, when the region gets isolated from rest of the country, the Corporation successfully completed Advance Winter Stocking exercise much before the closure of roads. The Corporation also maintained uninterrupted supply line of petroleum products, including ATF and LPG, in the State of Kerala during floods.

During the year, the Corporation released the highest new domestic LPG connections to more than 2 crore customers, out of which 1.68 crore connections were released under Pradhan Mantri Ujjwala Yojana, to the women of poor households. To meet the increased demand of LPG, the bottling capacity as well as storage capacity was augmented by 360 TMTPA and 7800 MT respectively and the highest number of 1,782 new LPG distributorships were commissioned during the year.

SERVO, the leading lubricant brand of your Corporation, registered a growth of 4 per cent in overall finished lubricants and 8.7 per cent in retail lubricants to achieve the top position in retail lube market. 123 SERVO grade approvals were obtained from Original Equipment Manufacturers (OEMs) during the year.

The Aviation Service of the Corporation continued to maintain its leadership position with a market share of 60 per cent. With the commissioning of nine new Aviation Fuel Stations (AFS), your Corporation now has 116 AFS in the country.

Explosives & Cryogenics

During the year, the Explosives and Cryogenics businesses of your Corporation continued with excellent performance and recorded the highest ever production and sales of explosives and cryocans. The Explosives group manufactured and sold 1,83,194 metric tonnes of explosives during the year, recording a growth of 3.6 per cent over the previous year's volume of 1,76,757 metric tonnes. The Cryogenics group sold 29,555 units of cryocans and cryovessels during 2018-19, as against previous year's sale of 28,782 units. During the year, the Cryogenics group developed new equipment for aviation, lubricants and refineries segments of the Corporation.

Research & Development

The R&D Centre of your Corporation plays a key role in supporting the business interests of the Corporation by developing economical, environment-friendly and socially responsible technology solutions. Apart from its core areas of fuels, lubricants & refining, the Centre is also focussed on cutting-edge research in the areas of Nanotechnology, Petrochemicals and Polymers, Biotechnology, Hydrogen Energy, Coal Gassification/Liquefaction and Gas-to-Liquid.

During the year, 103 lubricant formulations were developed and 87% of them were commercialised. 110 approvals were received from Original Equipment Manufacturers (OEMs) during the year.

A pilot plant was set up during the year to demonstrate a novel technology to convert greenhouse gas (CO2) to bio-fuel and high-value food supplement material (Omega-3 fatty acids) in collaboration with LanzaTech, USA. The R&D Centre also developed its own complete bio-methanation solution, including a best-in-class patented inoculum, process design and technical service support module. A five tonnes-per-day bio-methanation plant based on this technology was commissioned in March, 2018 at Faridabad.

In its bid to provide clean air technologies, the R&D Centre developed and patented the compact reforming process for producing Hydrogen-CNG (H-CNG) blends for use in internal- combustion engines. Last year, the Hon'ble Supreme Court of India took cognizance of this technology and directed IndianOil to operate a select number of buses on Hydrogen CNG mixtures in a Delhi bus depot. The Centre is in the process of setting up a four tonnes-per-day H-CNG production plant at an identified bus depot and the trials would be conducted for a period of 6 months on 50 BS-IV compliant CNG buses.

The performance guarantee test-run of DHDS Unit at Gujarat Refinery employing in-house developed diesel treating technology in collaboration with Engineers India Limited was successfully carried out. The capacity of the DHDS Unit has been augmented for producing diesel having sulphur below 10 ppmw.

The R&D Centre filed for 160 patents and was granted 107 patents (30 Indian and 77 overseas) during the year. IndianOil became the first oil & gas PSU to cross the milestone of 1,000 patents filing in April, 2019 with 794 active patents in its portfolio.

PROJECTS

To maintain its leadership position, your Corporation recognises the importance of developing countrywide infrastructure and has been consistently investing in several major and minor projects. Across the Divisions, efforts are made to ensure that the projects are implemented seamlessly. The projects are financed through an optimum mix of internal accruals and borrowings from domestic as well as international markets whenever required. During the year, the Corporation spent over Rs24,500 crore on capital projects at standalone level. In addition, over Rs3,600 crore was spent on capital expenses through Special Purpose Vehicle(SPV)/investment in Group companies. Most of the capex requirement was met through internal accruals.

The details of the completed and ongoing projects are as under :-

Completed Projects

• Paradip-Haldia-Durgapur LPG pipeline

• Jaipur-Panipat naphtha pipeline

• ATF pipeline at Kolkata

• LPG bottling plants at Banka, Bihar and Bhatinda, Punjab.

• Raze, rebuild and revamp of bulk storage depot at Doimukh, Arunachal Pradesh and a grassroots depot at Una, Himachal Pradesh

• 5-MMTPA LNG import terminal at Ennore (through a joint venture company)

Ongoing Projects costing more than D500 crore each

• Distillate yield improvement project at Haldia Refinery

• Polypropylene unit at Paradip Refinery

• Fuel quality upgradation project (BS-IV/VI) at Barauni Refinery

• BS-VI projects at all refineries

• INDMAX Unit alongwith associated facilities at Bongaigaon Refinery

• Atmospheric & Vacuum Unit and associated facilities of Barauni Refinery expansion project

• Ethylene Glycol project at Paradip Refinery

• Naphtha Cracker unit expansion and Mono Ethylene Glycol &

Butadiene extraction unit revamp at Panipat Refinery

• Paradip-Hyderabad product pipeline

• Augmentation of Paradip-Haldia-Durgapur LPG pipeline and its extension up to Patna and Muzaffarpur

• Ennore-Thiruvallur-Bengaluru-Puducherry-Nagapattinam- Madurai-Tuticorin natural gas pipeline

• Haldia-Barauni crude oil pipeline and conversion of existing Haldia-Barauni crude oil pipeline to product and gas pipelines.

• Koyali-Ahmednagar-Solapur product pipeline

• Paradip-Somnathpur-Haldia product pipeline

• Setting up of fertiliser plants at Barauni, Gorakhpur and Sindri through a Joint Venture Company

Petrochemicals

During the year 2018-19, the Corporation recorded the highest Petrochemicals sales of 2.64 MMT (domestic and exports) as against a sale of 2.37 MMT in 2017-18, recording a growth of 11.4 per cent. The Corporation's offerings include Polymers, Linear Alkyl Benzene, Purified Terephthalic Acid, Glycols and Butadiene. The Corporation's PROPEL brand is a leading brand in the Indian petrochemicals market.

During the year, the Corporation received approvals for its various polymer grades from about 20 major Indian and international OEMs. With focus on developing import substitution grades, three new polymer grades were rolled out during the year and 50 developmental projects were taken up with customers and OEMs.

Natural Gas

The Corporation is making significant investments across the Natural Gas value chain to build infrastructure and to enhance availability of the green fuel in the country. The Corporation now has 60 customers using Re-gasified Liquified Natural Gas (R-LNG). During the year, the R-LNG sale of the Corporation was 1.86 MMT. In addition, 2.10 MMT of R-LNG was internally consumed in three of the Corporation’s refineries, viz., Panipat, Mathura and Gujarat.

The Corporation has been a pioneer in India through its ‘LNG at Doorstep' service. During the year, the Corporation sold 36.12 TMT of LNG through trucks, registering a growth of 30.5% over the previous year.

During the year, the Corporation imported 20 cargoes (1.32 MMT) of LNG, against 17 cargoes (1.13 MMT) in the previous year. The Corporation is expanding its LNG sourcing infrastructure for catering to the growing demand in the country and has commissioned a 5-MMTPA LNG Import Terminal at Ennore near Chennai recently through a joint venture, which is the first of its kind on the East coast of India.

The Corporation is operating / implementing City Gas Distribution (CGD) Networks in 11 Geographical Areas (GAs) through its two Joint Venture Companies, Green Gas Ltd. (GGL) in Lucknow & Agra GAs and IndianOil-Adani Gas Pvt. Ltd. (IOAGPL) in Allahabad, Chandigarh, Panipat, Daman, Ernakulam, Udham Singh Nagar, Dharwad, South Goa & Bulandshahar GAs. The Corporation also participated in the 9th & 10th rounds of CGD Bidding invited by the Petroleum & Natural Gas Regulatory Board (PNGRB) and received authorisation for developing CGD Networks in 17 GAs on its own and in 12 GAs through its JV Companies, GGL & IOAGPL.

Pipeline infrastructure is critical to the development of natural gas market in the country and, therefore, the Corporation is laying several cross-country gas pipelines independently and through JV companies.

Exploration & Production

Your Corporation is actively engaged in upstream Exploration & Production (E&P) activities through Participating Interest (PI), joint ventures and wholly-owned subsidiaries. The upstream portfolio

of the Corporation consists of 10 domestic blocks including 4 discovered small fields (DSF) & 2 coal bed methane blocks, and 12 overseas blocks, with Participating Interest (PI) ranging from 3 per cent to 100 per cent. The overseas E&P portfolio of the Corporation is spread over 10 countries, viz., Canada, Gabon, Israel, Libya, Nigeria, Oman, Russia, UAE, USA & Venezuela.

During the year, the Corporation's share of production from upstream assets increased by 65 per cent compared to the previous year, registering an increase in volume from 2.66 MMT to 4.39 MMT. The Corporation's 2P reserves increased by 45 per cent during 2018-19 over 2017-18 (from 743 MMboe to 1,079 MMboe).

During the year, the Corporation, along with Bharat Petro Resources Ltd. was jointly awarded Block Onshore 1 in U.A.E., offered during the Abu Dhabi Licencing Round 2018. The Corporation alongwith its consortium partners was also awarded the licence for Block 32 in Israel by the Government of Israel. Another consortium of IndianOil (with 90 per cent PI - as lead operator) and Hindustan Oil Exploration Ltd. (with 10 per cent PI) emerged the winner in the Umatara Cluster in Assam under the DSF Bid Round II.

The Corporation acquired 17 per cent PI in Mukhaizna Oil Field, Oman, through acquisition of 100% share capital of Shell Exploration & Production Oman Ltd. from Shell Overseas Holding Ltd. The transaction marked the entry of the Corporation into the highly prospective Middle East region and is also consistent with the strategic objective of adding high quality producing assets to its upstream portfolio.

The Corporation is targeting to raise equity oil & gas production from its international and domestic acquisitions to 7 MMTPA by the year 2023-24 and further to 11 MMTPA by 2029-30 by suitable addition of new assets from time to time.

Overseas Business

Your Corporation has been constantly exploring various overseas opportunities in oil & gas sector with special focus on neighbouring countries. MoUs were signed during the year with partners in neighbouring countries of Bangladesh and Myanmar to explore the possibility of joint cooperation in upstream and downstream hydrocarbons sector. The Corporation is evaluating multiple opportunities in Bangladesh, Myanmar, Nepal, Saudi Arabia, Azerbaijan and Africa.

Alternative Energy

Your Corporation has an installed capacity of 216 MW of renewable energy, including 167.6 MW of wind and 48.6 MW of solar (comprising 20.5 MW grid-connected solar PV and 28.1 MW off-grid solar). During the year, 14.2 MW of solar PV capacity was added and installation of another 13 MW is in progress.

The Corporation has commissioned three waste-to-energy plants of 5 tonnes per day capacity each under Swachh Bharat Abhiyan. The total power generated during the year 2018-19 from these waste-to-energy plants was about 40,250 units (kWh).

Under the Government of India's ‘SATAT' (Sustainable Alternative Towards Affordable Transportation) initiative, 5,000 Compressed Bio-Gas (CBG) plants are to be set up by the year 2023, with production capacity of 15 MMTPA of CBG, which is 34 per cent of India's natural gas consumption during 2017-18. The Corporation has issued Letters of Intent to entrepreneurs for setting up 75 CBG plants. The technology for these plants shall be facilitated by IndianOil and their expected capacity is 792 tonnes per day.

The Corporation is setting up a second generation ethanol plant at Panipat based on ligno-cellulosic conversion of agricultural residue. Similar plants are also planned at Gorakhpur (Uttar Pradesh) and Dahej (Gujarat).

Sustainable Development

In view of the recent developments on climate change and sustainable development goals, there is an increased thrust on sustainable development. Your Corporation has taken cognizance of the fact and has been pursuing carbon management through energy conservation, energy efficiency, renewable energy & carbon sequestration; water management through reducing consumption, recycling & rain-water harvesting; and waste management through reduce, reuse & recycle initiatives.

The Corporation is replacing conventional lighting with LED lights across all its installations. Cumulatively, 4.5 lakh conventional light fittings have been replaced with LED. During the year, 2.1 lakh saplings were planted at various locations of the Corporation. Waste paper recycling is another major initiative of the Corporation and during the year 137 tonnes of waste paper was recycled through designated recyclers. The Corporation has installed 608 rainwater harvesting systems to harvest 3 billion litres of rainwater annually.

INFORMATION SYSTEMS & OPTIMISATION

Your Corporation migrated to SAP-HANA technology in January,

2019, becoming the first PSU and the largest installation in India to do so. IndianOil is the first corporate in India to integrate SAP and TReDS platform, which is an e-discounting platform to support financing of MSME receivables.

During the year, the first leg of service management of customerfacing ePIC portal was launched. All service requests and grievance resolution activities across various lines of business were brought on to the platform, resulting in significant improvement in single day resolution of service requests.

The Optimisation group in the Corporation carries out analysis of demand forecast covering purchase of crude oil cargoes through term contracts or spot purchases, logistics arrangements, export of products, etc. not only to maintain supply of products across the country but also to optimise corporate profitability. In order to reduce dependence on procurement of crude oil from conventional sources, 12 million barrels of different varieties of crude oil was procured from the USA during the year.

HEALTH, SAFETY & ENVIRONMENT (HSE)

Your Corporation is committed to conducting business with a strong environment conscience, ensuring sustainable development, safe workplaces and enrichment of the quality of life of its employees, customers and the community. All refineries of your Corporation are certified to ISO:14064 standards for sustainable development as well as for the Occupational Health & Safety Management System (OHSMS/OHSAS-18001), besides having fully equipped occupational health centres. A majority of the pipeline installations and some of the marketing installations of the Corporation are also ISO-14001 certified. Compliance with safety systems & procedures and environmental laws is monitored at the unit, division and corporate levels. The HSE activities of the Corporation are reviewed periodically in Board meetings. During the year, safety audits were carried out at various offices and locations and various training programmes were conducted across the Corporation covering safety-related topics.

HUMAN RESOURCES

Your Corporation has a strong and dedicated workforce of 33,498, consisting of 17,704 executives and 15,794 non-executives as on 31st March 2019, including 2,869 women employees comprising 8.56 per cent of the total workforce.

Your Corporation scrupulously follows the Presidential Directives and Guidelines issued by the Government of India regarding reservation in services for SC/ST/OBC/PWD (Persons with Disabilities)/ Ex-servicemen to promote inclusive growth. Rosters are maintained as per the directives and are regularly inspected by the Liaison Officer(s) of the Corporation as well as the Liaison Officer of the Government of India to ensure proper compliance. Grievance/Complaint Registers are also maintained at Division/ Region/Unit level for registering grievances from OBC/SC/

ST employees and efforts are made to promptly dispose of the representations/grievances received. In accordance with the Presidential Directive, the details of representation of SC/ST/OBC in the prescribed format are attached at Annexure-II to the Report.

The provisions of 4 per cent reservation for Persons with Disabilities in line with guidelines/instructions issued by the Government of India are implemented by the Corporation. Necessary concessions/ relaxations in accordance with the rules in this regard are extended to physically challenged persons in recruitment. The number of employees with disabilities as on 31st March 2019 was 695, constituting 2.07 per cent of the total employee strength.

Your Corporation maintained cordial industrial relations during the year, and continued to provide comprehensive welfare facilities to its employees to take care of their health, efficiency, economic betterment, etc., and to enable them to give their best at the workplace. Your Corporation supports participative culture in the management of the enterprise and has adopted a consultative approach with the collectives, establishing a harmonious relationship for industrial peace, thereby leading to higher productivity.

Your Corporation believes that holistic and meaningful employee engagement and their right development will enhance employees' potential. With the focus on aligning various HR policies with the Strategic Corporate Vision, many new initiatives have been undertaken in the human resources function, aimed at both - employee engagement and making the employees ‘future-ready'. Some of these initiatives are as under:

e-Learning

A structured, technology-aided e-Learning platform catering to the functional learning and development needs of the employees has been introduced, with an objective to provide continuous functional inputs.

Sponsoring officers for higher studies

A policy has been framed to sponsor the talent to executive management programmes at select management schools, namely IIMs - Ahmedabad, Bangalore, Calcutta, Lucknow and MDI-Gurugram after they secure admission through the rigorous selection process of these institutes.

Expanding horizons of Industry-Academia Partnership

With focus on strengthening ‘Industry-Academia' partnership, IndianOil collaborated with the Institute of Chemical Technology (ICT) Mumbai to set up the ICT-IOC Campus at Bhubaneswar. Admission process for the 5-year integrated M. Tech Programme, through JEE-Main examination has been completed for a batch size of 60 students, which saw an overwhelming response from students.

A unique ‘one-of-its-kind' Executive M. Tech. Programme for working professionals has been developed jointly by ICT and IIT Kharagpur commencing in June, 2019.

Benchmarking of HR Practices

An independent assessment was carried out by a renowned international consultant, as per the People Capability Maturity Model (PCMM) on three inter-related components in HR - People, Process and Technology.

The assessment has been done with a view to benchmark the Corporation’s HR processes in areas like Staffing, Work Environment, Performance Management, Training & Development, Competency Analysis & Development, Workforce Planning, Participatory Culture, Mentoring, etc.

The study helped to identify the ‘strength areas' and ‘action areas for improvement' in various HR processes and accordingly develop action plans - both short-term and long-term.

Women Leadership Development

A ‘one-of-its-kind' initiative which aims at long-term all-round development of a select group of women leaders at the middle management level was conceptualised and introduced. The purpose of this unique endeavour was to facilitate enhancement of leadership capacity of the participating women officers by developing greater self-confidence, directing their passion to grow and contribute to the organisation, understanding how other women leaders across varied industries have coped with their professional careers (role models), building a support/network group amongst women leaders, becoming more effective at the workplace, and developing an action plan for performance excellence and goal achievement.

Hindi Implementation

Your Corporation is committed to implementation of Hindi at its various offices/ locations/units in day-to-day functioning. The provisions of Official Language Act, 1963 and Rules notified thereunder are complied with. Communications received in Hindi and any application, appeal or representation written or signed by an employee in Hindi is replied to in Hindi. Official Language Implementation Committees (OLIC) have been formed in all offices/units to review the progress of implementation of official language policies.

RIGHT TO INFORMATION ACT

Your Corporation has put in place an elaborate mechanism across the organisation to deal with matters related to Right to Information Act, 2005 since its inception. The Corporation has designated one

Nodal Officer based at the Corporate Office and 31 First Appellate Authorities (FAAs), 42 Central Public Information Officers (CPIOs) and 42 Assistant Public Information Officers (APIOs). The details of all the designated officials, third-party audit reports, etc. are hosted and regularly updated on the website of the Corporation.

The Corporation has aligned with the online RTI portal launched by DoPT and all the applications/appeals received through the portal are disposed of through the portal only. Quarterly Reports/Annual Reports have been submitted through the online portal of Central Information Commission (www.cic.gov.in) within the prescribed time limit. A total of 7,539 requests and 918 first appeals were received during the year and all have been disposed of within the stipulated time. 84 second appeals were hied before the Central Information Commission, New Delhi, and all of them have been disposed of after due follow-up without any adverse remarks from the Hon'ble Commission.

COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION &

REDRESSAL) ACT, 2013

The provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 have been implemented across the Corporation with the clear objective of providing protection to women against sexual harassment at the workplace and for redressal of complaints. Internal Complaints Committees have been set up at Unit/Region/Head Office level, headed by senior level women executives to deal with sexual harassment complaints, if any, and to conduct enquiries.

There were three complaints of sexual harassment pending as on 1st April 2018. During the year 2018-19, six complaints were received and four complaints were disposed of. As on 31st March 2019, five complaints are pending.

Regular workshops are held especially for women employees, with the objective of bringing awareness about their rights and facilities at the workplace and emphasising the provisions of the Act. During the year, 62 workshops/awareness programmes were conducted. Gender sensitisation programmes for male employees are also being conducted regularly. Newly recruited employees in the Corporation are made aware of the provisions of the Act and the measures adopted by the Corporation to prevent such incidents.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Corporation has been actively engaged in various CSR activities over the years, which cover the entire gamut of social welfare/upliftment activities across the nation. The thrust areas under CSR inter-alia include health care and sanitation, education and employment-enhancing vocational skills, empowerment of women and socially/economically backward groups, etc. During the year, the Corporation spent the entire budget of Rs490.60 crore on various CSR activities. A report on the Corporation's CSR activities as per the provisions of the Companies Act alongwith CSR highlights during the year is annexed at Annexure-III to the report. The composition of the CSR Committee is provided in the Corporate Governance Report. The CSR policy of the Corporation can be accessed at the website of the Corporation on the link https://iocl.com/aboutus/Ioc_S&CSR_policy.pdf

VIGILANCE

The objective of the vigilance function is to ensure maintenance of the highest level of integrity throughout the Corporation. The Vigilance department acts as a link between the organisation and Chief Vigilance Commissioner. The Vigilance department takes preventive, punitive and participative steps, with emphasis on the preventive and participative aspects. During the year, 78 vigilance awareness programmes were conducted, which were attended by about 2,000 employees.

Disciplinary action under applicable Conduct, Discipline and Appeal Rules, 1980 and Certified Standing Orders are taken by the Corporation for irregularities/lapses. The number of disciplinary matters related to vigilance cases disposed off during the year 2018-19 was 48. The number of such cases pending at the end of year was 46. The aforesaid cases pertain to irregularities such as indiscipline, dishonesty, negligence in performance of duty or neglect of work, etc. The Corporation continuously and regularly endeavours to ensure fair and transparent transactions through technology interventions and system/process review in consultation with Central Vigilance Commission and internal vigilance set-up.

PUBLIC DEPOSIT SCHEME

The Public Deposit Scheme of the Corporation was closed with effect from 31st August 2009. The Corporation has not invited any deposits from the public during the year and no deposits are outstanding as on 31st March 2018 except the old cases amounting to Rs55,000/-, which remain unpaid due to unsettled legal / court cases.

CORPORATE GOVERNANCE

Your Corporation received the prestigious "Certificate of Recognition" for adopting and promoting exemplary Corporate Governance practices for 2017-18 from The Institute of Company Secretaries of India at the 18th ICSI National Award for Excellence in Corporate Governance.

The Corporate Governance Report highlighting the endeavours of your Corporation in ensuring transparency, integrity and accountability in its functioning has been incorporated as a separate section, forming a part of the Annual Report.

MANAGEMENT’S DISCUSSION & ANALYSIS REPORT

The Management's Discussion & Analysis (MDA) Report, as required under Corporate Governance guidelines, has also been incorporated as a separate section forming a part of the Annual Report.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report covering initiatives taken with environmental, social and governance perspective has been prepared in accordance with the directives of SEBI and forms a part of the Annual Report.

AUDIT COMMITTEE

The Audit Committee of your Corporation comprises three members, all of whom are Independent Directors. The recommendations made by the Audit Committee during the year were accepted by the Board. The other details of the Audit Committee, like its composition, terms of reference, meetings held, etc., are provided in the Corporate Governance Report.

The details of other Board Committees, their composition, meetings etc. are provided in the Corporate Governance Report.

CODE OF CONDUCT

The Board of your Corporation has enunciated a Code of Conduct for the Directors and Senior Management Personnel, which has been circulated to all concerned and has also been hosted on the Corporation's website. The Directors and Senior Management Personnel have affirmed compliance with the code of conduct for the financial year 2018-19.

RISK MANAGEMENT

Your Corporation considers risk management as a key element of its business operations and has put in place effective systems to identify, analyse, monitor and mitigate risks to ensure the organisation’s sustained growth and profitability. Accordingly, the Corporation has re-visited and revised its ‘Enterprise Risk Management Policy' during 2018-19. The Corporation's Enterprise Risk Management involves risk identification, assessment and categorisation (based on risk appetite) and is reviewed regularly by risk-owners to optimise risks with appropriate mitigation plan. A Risk Management Compliance Board comprising senior management personnel and headed by Chief Risk Officer reviews the various risks associated with the Corporation's business. The Corporation has constituted a Risk Management Committee comprising whole-time Directors, which oversees risk management activities. A report is, thereafter, put up to the Audit Committee and the Board.

INTERNAL FINANCIAL CONTROLS

Your Corporation has put in place adequate internal financial controls for ensuring the efficient conduct of its business in adherence with laid-down policies; the safeguarding of its assets; the prevention and detection of frauds and errors; the accuracy and completeness of the accounting records; and the timely preparation of reliable financial information, which is commensurate with the operations of the Corporation. The Corporation also has a separate Internal Audit department headed by an Executive Director, who directly reports to the Chairman. The Internal Audit department has a mix of officials from finance and technical functions, who carry out extensive audit throughout the year. The statutory auditors are also required to issue the Independent Auditor's Report on the Internal Financial Controls over financial reporting of the Corporation under Clause (i) of SubSection 3 of Section 143 of the Companies Act 2013. The report issued thereupon has been attached alongwith the Standalone and Consolidated Financial Statements respectively.

REMUNERATION TO THE AUDITORS

The Office of the Comptroller & Auditor General of India had appointed the Statutory Auditors for the financial year 2018-19. The Auditors’ remuneration for the year was Axed at Rs200 lakhs plus applicable taxes for Statutory Audit. In addition, reasonable out-of-pocket expenses incurred are also reimbursed at actuals. The total amount paid to the Statutory Auditors for all services rendered by them to the Company during 2018-19 was Rs434 lakhs.

COST AUDIT REPORT

Your Corporation maintains cost records as required under the provisions of the Companies Act. The Corporation had appointed Cost Auditors for conducting the audit of the cost records maintained by refineries, lube blending plants and other units for

the year 2018-19. A remuneration of Rs 18.50 lakhs and applicable

taxes was fixed by the Board for payment to the cost auditors for the year 2018-19, which was ratified by the shareholders in the last AGM. The cost audit for the year 2017-18 was carried out for various units of the Corporation and the cost audit report was hied by the Central Cost Auditor with the Central Government in the prescribed form within the stipulated time period. The cost audit report for 2018-19 would also be hied within the stipulated time.

SECRETARIAL AUDIT

The Secretarial Audit Report for the year 2018-19 confirms that the Corporation has complied with the applicable provisions of the corporate laws, guidelines, rules, etc., which are within the purview of the Corporation. The report, duly certified by the Secretarial Auditor, M/s.Ragini Chokshi & Co., Practising Company Secretaries is attached at Annexure-IV to this Report.

The Secretarial Auditor has made an observation that the Corporation has not complied with the requirements with regard to requisite number of Independent Directors on its Board for the period 26.07.2018 to 31.03.2019 and with regard to appointment of Woman Director on its Board for the period 06.07.2018 to 25.07.2018 and 12.03.2019 to 19.03.2019. In this regard, it is clarified that the Corporation being a Government Company under the administrative control of the Ministry of Petroleum & Natural Gas, the selection and appointment of Directors, (including Independent Directors and Woman Director) vests with the Government of India as per the Government guidelines.

REPORTING OF FRAUDS BY AUDITORS

The Auditors in their report for the year, have not reported any instance of fraud committed by the officers/employees of the Corporation.

PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES (MSEs) ORDER 2012

In line with the Public Procurement Policy of the Government of India, as amended, your Corporation is required to procure minimum 25% of total procurement of Goods and Services from MSEs, out of which 5% is earmarked for procurement from MSEs owned by SC/ ST entrepreneurs and 3% from MSEs owned by women. The procurement from MSEs (excluding crude oil, petroleum products & natural gas) during 2018-19 was as under:

PARAMETERS TARGETS : ACTUAL
Total Procurement from MSEs
(General, Reserved SC/ST & Women) 25% 29.07%
Procurement from Reserved 5% (Sub-target

0.5%

SC/ST MSEs out of 25%)
Procurement from Women-owned MSEs 3% (Sub-target out of 25%) 0.11%

The deficit of 4.5% and 2.89% under the sub-targets was due to non-availability of vendors in the sub-category; however, the target was achieved by procurement from other micro and small enterprises in line with the policy.

Several initiatives were undertaken to identify the entrepreneurs for procurement of goods and services from MSEs owned by SC/ST enterprises by way of conducting vendor development programmes.

SUBSIDIARIES, JOINT VENTURES & ASSOCIATES

During the year, a new Joint Venture Company, viz. Indradhanush Gas Grid Ltd. between your Corporation, ONGC Ltd., GAIL (India) Ltd., Oil India Ltd. and Numaligarh Refinery Ltd. was incorporated in August, 2018 for the purpose of laying Natural Gas pipeline connecting Guwahati to major cities in north-east. The equity holding of partners is 20 per cent each.

As required under the provisions of the Companies Act, 2013, a statement on the performance and financial position of each of the subsidiaries, joint venture companies and associates is provided as an annexure to the Consolidated Financial Statement. The financial statements of the subsidiaries have also been hosted on the website of the Corporation i.e. www.iocl.com under ‘Financial Performance' section.

In accordance with the provisions of the SEBI guidelines, your Corporation has framed a policy for determining material subsidiaries, which can be accessed on the Corporation's website at the link https://www.iocl.com/InvestorCenter/Policy_on_ Material_Subsidiary.pdf

RELATED PARTY TRANSACTIONS (RPTs)

In line with the provisions of the Companies Act, 2013 & SEBI guidelines, a policy on material RPTs has been framed, which can be accessed on the link https://www.iocl.com/InvestorCenter/ Policy_on_related_party_transactions.pdf. Your Corporation has undertaken transactions with related parties during the year in the ordinary course of business. In line with the RPT Policy, approval of the Audit Committee & Board, as the case may be, was obtained for such RPTs. As per the threshold mentioned in the policy, there was no material RPT during the year. The disclosures related to RPTs in accordance with applicable accounting standards are provided at Note-37 of the Standalone Financial Statement.

The details of contracts or arrangements with related parties referred to under Section 188 (1) of the Companies Act, 2013 in the prescribed Form AOC-2 are attached at Annexure-V of the report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Your Corporation recognises energy conservation as one of the most important parameter amongst various operating parameters and accords high importance to the same at all its refineries and operating units. The performance of units under the parameter is monitored on a continuous basis and efforts are made to further enhance by incorporating the latest technologies and global best practices. As a result of various energy conservation measures undertaken during the year, the energy performance parameter (indexed to the complexity of operations) in terms of MBN* of the refineries was 71.3, which is the best ever achieved, as against 72.6 in the previous year. Under pipeline operations, various initiatives were taken during 2018-19, which resulted in improvement of Specific Energy Consumption of Pipelines by 11.4 per cent.

In accordance with the provisions of the Companies Act, 2013 and rules notified thereunder, the details relating to Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo are annexed at Annexure-VI to the report.

*MBN-(MBTU/BBL/NRGF) is calculated as Thousand British Thermal Units per Barrel per Energy Factor.

PARTICULARS OF EMPLOYEES

The provisions of Section 197 of the Companies Act, 2013 and rules notified thereunder, regarding particulars of employees drawing remuneration in excess of limits specified are exempt for Government Companies.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

The following changes occurred in the Board / Key Managerial Personnel of the Corporation:-

Appointment

1. Shri Gurmeet Singh was appointed as Director(Marketing) w.e.f. 26.07.2018

2. Smt.Indrani Kaushal was appointed as Government Director w.e.f. 26.07.2018 and ceased to be Director w.e.f.

12.03.2019 consequent upon change of nomination by the Govt. of India. She was re-appointed as Government Director w.e.f. 28.05.2019.

3. Shri Akshay Kumar Singh was appointed as Director(Pipelines) w.e.f. 14.08.2018.

4. Smt. Sushmita Dasgupta was appointed as Government Director w.e.f. 20.03.2019.

5. Shri Parindu K. Bhagat, whose term as Independent Director ended on 01.12.2018, was re-appointed as Independent Director for another term of one year w.e.f. 02.12.2018 based on letter received from MoP&NG.

6. Shri Sandeep Kumar Gupta was appointed as Chief Financial Officer w.e.f. 18.05.2019.

Cessation

7. Shri Sanjay Kapoor ceased to be Independent Director w.e.f.

02.12.2018 consequent upon completion of his term.

8. Shri A.K.Sharma ceased to be Director(Finance) w.e.f.

01.02.2019 consequent upon his superannuation. Based on directive from MoP&NG, Shri A.K.Sharma was re-appointed as Director(Finance) w.e.f. 18.02.2019 for a period of 3 months and has ceased to be Director(Finance) w.e.f. 18.05.2019.

9. Smt. Sushmita Dasgupta, Government Director ceased to be Director w.e.f. 28.05.2019.

The Corporation has received the Certificate of Independence from all the Independent Directors confirming that they meet the criteria prescribed for Independent Directors under the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR).

A separate meeting of Independent Directors was held during the year as per provisions of the Companies Act, 2013 and SEBI LODR.

Dr. S.S.V.Ramakumar, Director (R&D) and Shri Ranjan Kumar Mohapatra, Director (Human Resource), are liable to retire by rotation and being eligible are proposed to be re-appointed at the forthcoming Annual General Meeting.

A brief profile of the Directors proposed to be appointed / reappointed at the forthcoming AGM is provided in the notice of the AGM.

BOARD MEETINGS

During the year, 12 meetings of the Board of Directors were held. The details of the meetings attended by each Director are provided in the Corporate Governance Report and hence not repeated to avoid duplication.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The provisions of Section 134(3)(p) of the Companies Act, 2013 require a listed entity to include a statement indicating the manner of formal evaluation of performance of the Board, its Committees and of individual Directors. However, the said provisions are exempt for Government Companies as the performance evaluation of Directors is carried out by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MoP&NG) as per laid down evaluation methodology.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The provisions of Section 134(3)(e) of the Companies Act, 2013 regarding the policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided in Sec 178(3) are exempted for Government Companies.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant and material orders were passed by the regulators or courts or tribunals that impact the going concern status of the Corporation and its operations in future except for notice issued by National Green Tribunal and Haryana State Pollution Control Board with regard to air and water pollution caused by PTA Unit of Panipat Refinery. The Corporation’s response in the matter has been hied and the matter is being followed-up for resolution.

VIGIL MECHANISM / WHISTLE-BLOWER POLICY

The Corporation has framed a whistle-blower policy wherein the employees are free to report any improper activity resulting in violation of laws, rules, regulations or code of conduct by any of the employees, to the Competent Authority or Chairman of the Audit Committee, as the case may be. Any complaint received is reviewed by the Competent Authority or Chairman of the Audit Committee as the case may be. The policy provides that the confidentiality of those reporting violations shall be maintained and they shall not be subjected to any discriminatory practice. No employee has been denied access to the Audit Committee. During the year, the Whistle Blower Policy was amended to enable employees to report leakage / misuse of Unpublished Price Sensitive Information in violation of IndianOil's Insider Trading Code. The policy on Vigil Mechanism/Whistle-Blower can be accessed on the Corporation's website at the link https://www.iocl.com/InvestorCenter/Whistle_ Blower_policy.pdf

DETAILS OF LOANS / INVESTMENTS / GUARANTEES

Your Corporation has provided loans/guarantees to its subsidiaries, joint ventures & associates and has made investments during the year in compliance with the provisions of the Companies Act, 2013 and rules notified thereunder. The details of such investments made and loans/guarantees provided as on 31st March 2019 are provided in the Standalone Financial Statement under Notes 4, 5, 36 and 42.

EXTRACT OF ANNUAL RETURN

As required under the provisions of the Companies Act, 2013, the extract of Annual Return for the financial year ended 31st March 2019 in the prescribed form MGT-9 has been prepared and hosted on the website of the Corporation www.iocl.com.

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Corporation complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

CREDIT RATING OF SECURITIES

The Credit rating assigned by Rating Agencies for the various debt instruments of the Corporation is provided in the Corporate Governance Report.

INVESTOR EDUCATION & PROTECTION FUND (IEPF)

The details of unpaid/unclaimed dividend and shares transferred to the IEPF in compliance with the provisions of the Companies Act, 2013 has been provided in the Corporate Governance Report.

MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the Corporation between the end of the financial year and date of this report. There has been no change in the nature of business of the Corporation.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under clause (c) of sub-section (3) of Sec 134 of the Companies Act, 2013 with respect to the Directors'

Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ANNEXURE-I

DIVIDEND DISTRIBUTION POLICY

PREAMBLE:

The shares of Indian Oil Corporation Limited (the "Company") are listed on National Stock Exchange of India Limited, Mumbai and BSE Limited, Mumbai. As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Company is required to formulate a Dividend Distribution Policy which shall be disclosed in its Annual Report and on its website.

The Board of Directors of the Company ("the Board") has approved the Dividend Distribution Policy of the Company ("the policy").

OBJECTIVE:

The Company strives for maximisation of shareholders' value and believes that this can be attained by driving growth. The policy endeavours to strike an optimum balance between rewarding shareholders through dividend and ensuring that sufficient profits are retained for growth of the Company and other needs. The objective of the policy is to lay down a consistent approach to dividend declaration.

PARAMETERS FOR DIVIDEND DISTRIBUTION:

• The Company has only one class of shares i.e. Equity shares and, hence, the parameters disclosed hereunder apply to the same.

• The Board while considering payment of dividend for a financial year may, interalia, consider the following factors:-

• Profit for the financial year as well as general reserves of the Company

• Projections of future profits and cash flows

• Borrowing levels and the capacity to borrow

• Present and future Capital expenditure plans of the Company including organic/inorganic growth avenues.

• Applicable taxes including tax on dividend

• Compliance with the provisions of the Companies Act or any other statutory guidelines including guidelines issued by Govt. of India

• Past dividend trend for the Company and the industry

• State of economy and capital markets

• Any other factor as may be deemed fit by the Board

• The profits for a year may be adjusted at the discretion of the Board, for the purpose, to exclude exceptional or one off items or non-cash items resulting from change in law, accounting policies, accounting standards or otherwise.

• The Company would endeavor to pay minimum annual dividend of 30% of Profit After Tax (PAT) or 5% of net worth, whichever is higher subject to the maximum dividend permitted under the extant legal provisions.

• In case the Company declares a lower or no dividend for a

particular year due to inadequacy or absence of profits/ reserves or otherwise, the reasons and justification thereof shall be disclosed to the shareholders through Annual Report of the Company.

• The company is committed to continuous growth and has plans requiring significant capital outlay. The retained earnings, after distribution of dividend, shall primarily be utilized towards this purpose.

• Dividend shall be recommended by the Board for approval of shareholders of the Company for payment. However, the Board may also consider payment of interim dividend as and when it feels appropriate.

GENERAL:

• In the event of the policy being inconsistent with any new regulatory provision, such regulatory provision shall prevail upon the corresponding provision of this policy and the policy shall be construed to be amended accordingly from the effective date of such provision.

• The Company reserves its right to alter, modify, add, delete or amend any or all of the provisions of the policy as it may deem fit or in accordance with the guidelines as may be issued by SEBI, Government of India or any other regulatory authority. The change in the policy shall, however, be disclosed alongwith the justification thereof on the Company’s website and in the ensuing Annual Report in accordance with the extant regulatory provisions.

ANNEXURE-II

SC/ST/OBC REPORT-I

Annual Statement showing the representation of SCs, STs and OBCs as on 1st January 2019 and number of appointments made during the preceding calender year

Name of the Public Enterprises : Indian Oil Corporation Limited

Groups

Representation of SCs/STs/OBCs (As on 1.1.2019)

Number of appointments made during the calendar year 2018

By Direct Recruitment

By Promotion

By Deputation/ Absorption

Total No. of Employees SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Executives
A 17848 2965 1337 3826 1292 215 111 384 2656 442 186 0 0 0
Non-executives
B 5605 960 588 388 0 0 0 0 454 109 38 0 0 0
C 9591 1805 716 2394 479 68 59 201 1375 252 69 0 0 0
D (Excluding Sweeper) 409 79 20 121 182 37 5 60 0 0 0 0 0 0
D (Sweeper) 5 2 0 1 0 0 0 0 0 0 0 0 0 0
Total (Executives plus Non-executives) 33458 5811 2661 6730 1953 320 175 645 4485 803 293 0 0 0

SC/ST/OBC REPORT-II

Annual Statement showing the representation of SCs, STs and OBCs in various group A services as on 1st January 2019 and number of appointments made in the service in various grades in the preceding calender year

Name of the Public Enterprises : Indian Oil Corporation Limited

Pay Scale(in

Representation of SCs/STs/OBCs

Number of appointments made during the calendar year 2018

rupees)

(As on 1.1.2019)

By Direct Recruitment

By Promotion

By Deputation/ Absorption

Total No. of Employees SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
50000-160000 38 5 2 14 23 3 2 6 0 0 0 0 0 0
60000-180000 5936 938 452 1857 1269 212 109 378 142 28 8 0 0 0
70000-200000 3174 507 219 758

No recruitment is made in this Group.

575 105 51 0 0 0
80000-220000 3241 579 252 632

No recruitment is made in this Group.

635 108 42 0 0 0
90000-240000 1775 291 151 293

No recruitment is made in this Group.

468 90 42 0 0 0
100000-260000 1452 319 128 202

No recruitment is made in this Group.

333 62 26 0 0 0
120000-280000 1247 224 105 64

No recruitment is made in this Group.

240 29 13 0 0 0
120000-280000 667 78 24 4

No recruitment is made in this Group.

160 13 4 0 0 0
120000-280000 242 20 3 2

No recruitment is made in this Group.

78 6 0 0 0 0
150000-300000 76 4 1 0

No recruitment is made in this Group.

25 1 0 0 0 0
G.Total 17848 2965 1337 3826 1292 215 111 384 2656 442 186 0 0 0

ANNEXURE-III

HIGHLIGHTS OF CSR ACTIVITIES DURING 2018-19

IndianOil has been actively engaged in a gamut of social welfare/ upliftment activities across the nation, in addition to reaching essential fuels viz. Kerosene, LPG, Petrol, Diesel, etc. to the nook and corner of the country. IndianOil's key Corporate Social Responsibility (CSR) thrust areas include ‘Safe drinking water and protection of water resources', ‘Healthcare and sanitation', ‘Education and employment-enhancing vocational skills’, ‘Empowerment of women and socially/economically backward groups', etc. IndianOil has a long standing CSR legacy, which started much before the CSR legislation (Companies Act, 2013) came into force in 2014-15. The CSR projects of IndianOil are undertaken mostly for improving the quality of life in various communities, which invariably include marginalized / underprivileged sections of the society, viz. schedule caste, schedule tribe, other backward caste, physically handicapped, etc. With Pan-India presence, IndianOil undertakes CSR activities across the country, from Leh in J&K in the North, to the North Eastern States, to the aspirational/ backward districts/ naxal affected areas, to Gujarat in the West and Tamil Nadu/Kerala in the South. For the year 201819, entire CSR budget allocation of Rs490.60 crore was spent, thereby achieving 100% budget utilization.

KEY CSR INITIATIVES IN 2018-19

1. IndianOil Vidushi

With an objective to help girls from the under-privileged sections of the society to gain admission in prestigious Engineering Institutes viz. IITs, NITs, CETs, IIITs, etc., IndianOil started a unique program "IndianOil Vidushi" in July, 2018 at 2 residential centres viz. Bhubaneswar (Odisha) & Noida (Uttar Pradesh). While the Bhubaneswar centre caters to the students of Odisha, Jharkhand & Chhattisgarh, the Noida centre primarilly caters to the students from J&K, Uttarakhand, Himachal Pradesh and Punjab. The students are provided specialized coaching and mentoring after class XIIth to succeed in JEE Main, JEE Advanced & other Central and State Engineering Entrance Examinations. Maximum 30 girls are selected for each centre through written test and personal interview on merit-cum-means basis. The entire cost for specialized coaching, study material, boarding, food & other consumables, blanket, hygiene kit, dress set, health insurance etc. is borne by IndianOil. During 2018-19, 30 girl students were enrolled for Bhubaneswar Centre and 26 girls for Noida Centre. Out of 56 girls, 46 cleared JEE Main, out of which 17 girls cleared JEE Advanced and will have the opportunity to join various IITs.

3. Aids & Assistive devices to Divyangjan

Assistive devices like tricycles, wheel chairs, crutches, walking sticks, Braille kits for visually impaired, hearing aids, artificial limbs, etc. were provided to more than 20,000 Divyangjan across 21 states of India in association w ith Artificial Limbs Manufacturing Corporation (ALIMCO). The beneficiaries were selected and their disabilities were assessed through assessment camps organized in the villages near the target locations. The training to use these assistive devices were also provided at the distribution camps.

4. IndianOil Gyanodaya Scheme in Govt. ITIs & Polytechnics

IndianOil Gyanodaya Scheme was launched in 2017 with an aim to provide scholarships on merit-cum-means basis to students pursuing 2-year regular courses in Government ITIs and 3-year regular courses in Government Polytechnics, to incentivize them to perform well. The scheme aims to cover 36 Government institutes (18 ITIs and 18 Polytechnics) near 9 IndianOil Refinery locations. 50 students per batch are selected from each institute every year. Each student is provided scholarship of 1000/- per month for the entire duration of the regular courses. During 2018-19, 1138 students from 30 ITIs and Polytechnics were selected for this scheme.

5. Skill Development Institute, Bhubaneswar, Odisha

Skill Development Institute, Bhubaneswar (SDl-B) was established on 9th May 2016 with an aim to provide opportunities for skilling to the unemployed and underprivileged youth of Odisha and to provide skilled manpower to the industry. Initially, SDI-B started operation in 2 trades viz. Industrial Electrician & Welder. However, with increasing demand of skilled manpower, 6 new courses were added viz. Computer Data Application (only for girls), Fitter Fabrication, Instrumentation Technician, Pipe Fitter (City gas Distribution), Solar PV Installation and LPG Mechanic. About 240 students per batch are being skilled in 8 trade courses, which are of 3 to 6 months duration each. Since inception, 810 underprivileged youth were skilled and certified with over 85% placements. Hon'ble President of India laid the foundation of the permanent campus of SDI-B on 18.03.2018 at Taraboi, Jatni, Odisha, which will be a mega-world-class model skill academy to be set up with technical support from National Skill Development Corporation (NSDC). Once functional, about 3,000 to 4,000 youth will be trained every year in 16 regular trades pertaining to the hydrocarbon sector and local industries.

6. Assam Oil School of Nursing, Digboi, Assam

Assam Oil School of Nursing (AOSN), established in 1986, offers 3-year Diploma in General Nursing and Midwifery (GNM) course to young girls with intake capacity of 30 students per year. 4-year B.Sc. (Nursing) course started from the same campus in 2014 with intake of 30 students per year. Before AOSN came into being, there was a dearth of qualified nurses in the North East. AOSN is able to provide opportunities to young under-privileged girls to bridge this gap and simultaneously provide them stable careers and livelihood. Since inception, 410 students have successfully completed GNM course with 100% placement record.

7. Empowering women through Pradhan Mantri Ujjwala Yojana

As per a study by World Health Organization, about 1 million people die every year in India, which can be attributable to diseases related to indoor air pollution. Pradhan Mantri Ujjwala Yojana (PMUY) aims to safeguard the health of women & children by providing them with cleaner cooking fuel, i.e. LPG. Under this scheme, IndianOil contributes 20% of 2% of previous year’s profit towards release of one-time grant to BPL families in rural areas for release of new LPG connections. During 2018-19, under CSR, LPG connections were released to about 5.33 lakh families.

8. Assam Oil Division Hospital, Digboi, Assam

Assam Oil Division Hospital, Digboi, established in 1906, is a 200-bed hospital with modern facilities. It caters to the population residing near Digboi and other nearby areas of the North East. Every year, about 1 lakh patients are treated at this hospital, out of which about 15% are non-employee patients. This hospital registers about 4,000 patients for indoor admissions and conducts operative procedures on about 2,000 patients every year. Health camps of general and specialized nature are also organized regularly by the hospital to reach out to the poor villagers in the vicinity, who have no access to medical consultations or treatment. During 2018-19, 8683 non-employee patients were treated at the hospital.

9. Swarna Jayanti Samudayik Hospital, Mathura, Uttar Pradesh

Swarna Jayanti Samudayik Hospital at Mathura (with 50 beds), established in 1999, provides medical treatment to residents near Mathura Refinery, Uttar Pradesh. The hospital provides free treatment to the destitute and offers subsidized treatment to others. During 2018-19, 56,437 patients were treated at this Hospital, out of which operative procedures were conducted on 727 patients.

10. Sarve Santu Niramaya, Digboi, Assam

IndianOil's unique CSR initiative titled "Sarve Santu Niramaya" (Good health to all) was launched in December 2012 to provide free health consultation and free medicines to human beings as well as livestock of the villages near Digboi Refinery. It was felt that good health of livestock is as important as that of the human beings, as livestock was a key livelihood generator for the villagers. During 2018-19, 21 Sarve Santu Niramaya camps were organized, in which 2,507 human beings and 6,510 Livestock were treated/ vaccinated.

11. IndianOil Sports Scholarship Scheme

IndianOil has been promoting sports for over three decades. In line with the sports policy adopted in 1985, the Corporation has, over the years, recruited many promising sports persons, who went on to reach their peak in their chosen disciplines. The purpose of recruiting sportspersons is to nurture their talent early on, enhance their performance at the National & International level & bring laurels for the Company and the Country.

IndianOil introduced a Sports Scholarship Scheme in the year 2006-07 for promising young sports persons representing the States in team games and National ranking in others. This scheme started with 55 scholarships in 7 games/sports. At present, 250 scholarships in 20 games/sports (Olympic sports categories & other popular games viz. Cricket, Carom, Chess, etc) are awarded to upcoming junior players from 13 to 16 years of age in two categories viz. Elite Scholar and Scholar. The scholarship amount varies from Rs 15000/- to Rs 19000/- per month for Elite Scholars and Rs 12000/- to Rs16000/- per month for Scholars for a period of 3 years and cost of kit items is also paid by IndianOil. In addition, IndianOil also provides assistance towards travel, lodging etc. for scholars in individual games. During 2018-19, 103 sportspersons benefited from the scheme and since inception, more than 900 sports persons have benefited from IndianOil scholarship scheme.

12. Robotic Scavenging Machine (Bandicoot) to Kumbakonam Municipal Corporation, Tamil Nadu

As per the data provided by National Commission for Safai Karamacharis (NCSK), at least one Indian worker has died while cleaning sewers or septic tanks every five days since the beginning of 2017 and is considered one of country's deadliest jobs and most insidious form of caste discrimination. To alleviate this problem, IndianOil has provided Robotic Scavenging Machine (named Bandicoot) to Kumbakonam Municipal Corporation, Tamil Nadu. Bandicoot has a control unit/user interface and a robotic spiderlike device at the bottom with four limbs, which is lowered into the manholes for undertaking cleaning operations. It is equipped with seven cameras and many sensors. The limbs scoop/collect the silt from different angles inside the manhole and heap the dirt at one place, which is then lifted up using ropes & buckets. Bandicoot works with precision, takes less time, requires only one/ two persons to operate and saves many man-hours.

   

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