Enter the first few characters of Company and click 'Go'

Directors Report of Hindustan Petroleum Corporation Ltd.

Mar 31, 2023

On behalf of the Board of Directors, it gives me immense pleasure in presenting this Report on the performance of your Corporation for the financial year ended March 31,2023.

The year 2022-23 has been a year of robust physical performance, whereby your Corporation achieved the highest ever combined crude thruput of 19.09 MMT, with a growth of 36.7% over previous year. Your Corporation also achieved the highest ever annual sales of 43.45 MMT, representing a growth of 11% over previous year. These helped your Corporation achieve highest ever ''Revenue from Operations'' of H 4,66,192 Crore as compared to H 3,73,897 Crore during previous year.

Profitability for the year was impacted due to exceptionally high international crude oil prices, suppressed marketing margins on select transport fuels, hardening of interest rates and adverse INR/USD exchange rates, resulting into Net Loss of H 8,974 Crore for the year.

Going forward, your Corporation has plans for value unlocking to consolidate all green and emerging business opportunities under one umbrella as well as to derive maximum value from high-growth high-potential lubricant business, by exploring various options available.

HIGHLIGHTS

(H / Crore)
	Consolidated		Standalone
	2022-23	2021-22	2022-23	2021-22
FINANCIAL PERFORMANCE
Sales/Income from Operations	4,64,989.70	3,72,867.94	4,64,683.79	3,72,641.60
Earnings before Interest, Tax, Depreciation, Amortization & Impairment and Exceptional items	(3,249.66)	14,141.30	(5,453.09)	13,145.54
Depreciation, Amortization & Impairment Expenses	(4,560.15)	(4,000.36)	(4,329.97)	(3,969.11)
Finance Cost	(2,174.11)	(997.32)	(2,131.85)	(972.73)
Profit before Tax (PBT)	(9,983.92)	9,143.62	(11,914.91)	8,203.70
Tax Expenses	3,003.69	(1,849.39)	2,940.88	(1,821.07)
Profit / (Loss) for the year (PAT)	(6,980.23)	7,294.23	(8,974.03)	6,382.63
Balance brought forward from previous financial year	39,300.16	36,068.83	36,590.51	34,271.39
Amount available for Appropriation
Appropriations/ Others:
Debenture Redemption Reserve (net)	30.72	(2.11)	-	-
Dividend	(1,985.97)	(3,227.20)	(1,985.97)	(3,227.20)
Other Comprehensive Income that will not be reclassified to profit or loss (net of tax)	(183.42)	132.27	(180.73)	129.55
Utilisation for shares buy-back	-	(932.39)	-	(932.39)
Other Appropriations	-	(33.47)	-	(33.47)
Balance carried forward	30,181.26	39,300.16	25,449.78	36,590.51
SHAREHOLDERS'' VALUE (?)
Earnings per Share	(49.21)	51.36	(63.26)	44.94
Cash Earnings per Share	(37.91)	83.24	(53.14)	76.40
Book Value per Share	227.44	291.88	195.36	272.65

PHYSICAL PERFORMANCE (MMT)	2022-23	2021-22
Market Sales (including Exports) #	43.45	39.14
Crude Thruput:
Mumbai Refinery	9.80	5.56
Visakh Refinery	9.29	8.41
Total Crude Thruput	19.09	13.97
# As per Ind AS

SALES/INCOME FROM OPERATIONS

Your Corporation has achieved Sales/Income from Operations of H 4,64,683.79 Crore in the financial year 2022-23 as compared to H 3,72,641.60 Crore in the financial year 2021-22 on a standalone basis.

PROFIT / (LOSS)

Your Corporation has reported Earnings before Interest, Tax, Depreciation & Amortization and Impairment (EBITDA) of H (5,453.09 Crore) in the financial year 2022-23 as against H 13,145.54 Crore in the financial year 2021-22 and Profit/(Loss) for the year of H (8,974.03 Crore) in the financial year 2022-23 as compared to H 6,382.63 Crore in the financial year 2021-22 on a standalone basis.

DIVIDEND

The Board of Directors, after taking into account the Financial Results of the Corporation, has not recommended any dividend for the financial year 2022-23. A final dividend of H 14 per share was recommended for the financial year 2021-22.

INTERNAL RESOURCES GENERATION

Your Corporation has generated Internal Resources (net of dividend payout) of H (9,524.80 Crore) during the financial year 2022-23 as compared to H 7,622.63 Crore during the financial year 2021-22 on a standalone basis.

CONTRIBUTION TO EXCHEQUER

Your Corporation has contributed a sum of H 92,204.21 Crore to the exchequer during the financial year 2022-23 by way of duties and taxes, as compared to H 85,745.58 Crore during the financial year 2021-22 on a standalone basis.

REFINERY PERFORMANCE

In the financial year 2022-23, your Corporation''s Mumbai and Visakhapatnam refineries demonstrated exceptional performance in their refining operations, showcasing an impressive improvement. A significant milestone was achieved by the refineries, as they recorded the highest-ever refining

throughput of 19.09 MMT. The Mumbai refinery achieved a remarkable feat with highest-ever crude thruput of 9.80 MMT during FY 2022-23, immediately after expansion of refining capacity to 9.50 MMT. It is also noteworthy that Mumbai refinery achieved highest ever crude thruput in each of the successive quarters of FY 2022-23. The Visakh refinery also exhibited excellent performance by processing a crude thruput of 9.29 MMT with an impressive capacity utilization of 111.9%. These exceptional accomplishments contributed to the production of the highest-ever volumes of MS, HSD, and LOBS during the financial year 2022-23.

In March 2023, your Corporation accomplished a significant milestone by successfully commissioning a state-of-the-art Crude Distillation Unit with a capacity of 9 MMTPA as part of the ongoing Visakh Refinery Modernization Project (VRMP). Prior to the commissioning of the Crude Distillation Unit, your Corporation successfully commissioned other critical systems, including, Grid Power connectivity, Raw Water, Bearing Cooling Water, Sea Cooling Water, Plant Air/ Instrument Air Cryogenic Nitrogen Unit, and a state-of-the-art "Staged Flare". The other units of the VRMP are in the advanced stages of commissioning.

The Mumbai Refinery achieved outstanding performance during the financial year 2022-23 by surpassing numerous previous best performance milestones for unit thruput and production through optimum asset utilization. The annual production of LPG, MS, HSD, and LOBS reached the highest-ever level for the Mumbai Refinery. Further, in January 2023, the Visakh Refinery achieved the highest-ever monthly production of MS. In addition to these remarkable achievements, six new crudes, including, Ural, Amenam Blend, Egina, Tupi, Novy Port, and Sokol, were processed for the first time in our refineries.

Your Corporation''s refineries are committed to promote sustainable practices and effective energy utilization. Through consistent implementation of energy conservation recommendations, the Mumbai and Visakh Refinery achieved impressive energy savings of 46,262 and 38,780 SRFT/year (Standard Refinery Fuel Tonnage per year) respectively in the financial year 2022-23.

Refineries prioritize safety and continually seek to enhance safety practices. Your Corporation successfully implemented the Vulnerability Index (VI) for job safety monitoring. Additionally, during the financial year 2022-23, Mumbai Refinery achieved

the highest-ever safety record, completing 35.6 million manhours of safe operation, a remarkable accomplishment.

Environmental protection remains a top priority at our refineries, and your Corporation is committed to reduce the carbon footprint and promote sustainable practices. During the financial year 2022-23, the Mumbai Refinery commissioned rooftop solar panels with a capacity of 700 KW. Furthermore, the Mumbai Refinery continued to source more than 70% of its power requirement from the grid. Additionally, as part of the Visakh Refinery Modernization Project (VRMP), the Visakh Refinery commissioned a project to connect the refinery power to grid at 220KV levels.

At Refineries, we recognize the transformative power of digital acceleration, and we are committed to embrace the latest digital technologies to optimize our operations and enhance our performance. During the financial year 2022-23, your Corporation has made digital acceleration a top priority and launched several initiatives to achieve our digital acceleration objectives. As part of this journey, Virtual Reality Training facilities were launched recently in both Mumbai and Vishakhapatnam Refineries.

Refineries are constantly striving to enhance their refining capacity and achieve new milestones. In line with this commitment, your Corporation is setting up a new 9 MMTPA grass root Refinery-cum-Petrochemical Complex through its joint venture company, HPCL Rajasthan Refinery Limited (HRRL), in Pachpadra, Barmer District of Rajasthan, in Joint Venture with the Government of Rajasthan. The project has already made significant progress, with major process turnkey contracts and LSTK contracts for associated works/utilities already in place. Construction work is underway at the site in full swing.

The particulars with respect to conservation of energy, technology absorption, imported technology, research & development expenditure, foreign exchange earnings & outgo are furnished in Annexure I. The particulars relating to control of pollution and other initiatives by refineries are furnished in Annexure II.

OPERATING PERFORMANCE OF REFINERIES

Parameter	Unit	Mumbai Refinery	Visakh Refinery
Crude Thruput	TMT	9,804.3	9,286.6
Capacity utilization	%	103.2	111.9
Distillate yield	%	77.4	68.0
Fuel & Loss	%	7.40	7.54
Specific Energy Consumption	MBTU/ BBL/ NRGF	76.0	79.12
Gross Refinery Margin (Before factoring-in impact of export levies)	$/BBL	14.82	9.20

MARKETING PERFORMANCE

Your Corporation recorded the highest ever sales of 43.45 MMT in FY 2022-23, including exports (2021-22: 39.14 MMT). In the domestic segment, your Corporation recorded the highest ever volumes of 42.19 MMT (2021-22: 37.42 MMT) with a YoY growth of 12.8% and achieved a market share gain of 0.94% amongst Industry. During the year, the global geopolitics held centre stage leading to volatility in crude oil prices, new energy supply dynamics and increased focus on energy security. Despite the heightened price and margin fluctuations witnessed by the oil and gas industry, your Corporation has continued to meet the market demands and ensured the availability of petroleum products across its network.

In the motor-fuel segment, your Corporation achieved the highest ever sales volume of 27.4 MMT in FY 2022-23 with a market share gain of 0.28% on a Total Motor Fuels on Industry basis. During the year, 1161 Retail Outlets were commissioned taking the total retail network to 21186 numbers. As part of the energy transition process, your Corporation is in the forefront to provide alternate fuels in its Retail network and make them Energy Stations. During the year, 301 CNG facilities were added at Retail Outlets and EV Charging Systems (EVCS) were added at 1026 Retail Outlets. Your Corporation has also bagged an order for installation of EV chargers in 10 parking lots of Brihanmumbai Municipal Corporation.

Your Corporation launched ''poWer95'', a high 95 octane premium branded petrol, adding to the bouquet of premium offerings to the esteemed customers. In our endeavour towards low carbon economy, solar panels were installed at 4064 Retail Outlets during the year, taking the total number of Retail Outlets with solar power to 10475 which accounts for more than 49% of the total Retail network. Your Corporation has carried out digitization of Earth Pit testing, a critical safety requirement, and has onboarded 1 1,279 Retail Outlets onto a digital platform. This was implemented by onboarding electrical contractors in the VA (Visual analytics) portal enabling them to conduct on-line testing of Earth Pit resistance. Your Corporation also introduced co-branded credit cards viz. HPCL BoB Energie, HPCL-IDFC First Power and First Power on the Indian RuPay platform. Your Corporation has signed an MoU with HDFC AMC Ltd. for mutual fund sales and with M/s Petromin Corporation, Saudi Arabia for exploring setting up of vehicle service centres in Retail Outlets of the Corporation and collaboration in the field of e-mobility.

In LPG business vertical, your Corporation has set a new record with highest ever sales of 8.1 MMT, registering a growth of 4.9% over the previous year which is highest amongst the industry. ''HP Gas'' has enrolled over 25.98 lakh new customers during the year which includes 14.96 lakhs customers under ''Pradhan Mantri Ujjwala Yojna (PMUY 2.0)''. To meet the growing LPG demand, your Corporation has commissioned 3 LPG Plants during the year, namely 120 TMTPA capacity LPG Plant at Barhi, Jharkhand; 180 TMTPA capacity LPG Plant at Patalganga, Maharashtra;

and 60 TMTPA capacity LPG Plant at Sitarganj, Uttarakhand. Additionally, 21 mounded storage vessels were commissioned at 9 different locations augmenting the LPG storage capacity by 9.8 TMT. Your Corporation sustained its leadership position in the FTL segment, selling over 5.5 million ''APPU'' cylinders and achieving a market share of over 44%. Your Corporation has commissioned 45 new domestic and 51 non-domestic LPG distributors, totalling to 6283 domestic LPG distributors and 328 LPG non-domestic LPG distributors. Your Corporation has conducted several health and safety campaigns, including over 1,043 Sadak Suraksha Camps for LPG transporters and crew. Your Corporation has added fire extinguishers to its LPG allied business product line to support safety in customers'' premises.

In the Lubricant segment, your Corporation has recorded an overall sales volume of 632 TMT of lubricants during FY 202223, including exports of about 6 TMT to 18 countries. Your Corporation has achieved the highest ever sales to countries in the Middle East region and Africa via its Dubai based 100% subsidiary. Your Corporation has signed a Trademark Licensing Agreement with Chevron Corporation, allowing it to manufacture, distribute and market Chevron''s lubricant products under the Caltex brand, complementing its existing product portfolio, especially in the competitive Bazaar segment. The commercial production and sales of Diesel Exhaust Fluid (DEF) was scaled up for second year in a row, recording highest ever sales of more than 25 TMT during the year.

Your Corporation strengthened and widened the geographical reach of its Lubes marketing network by adding 36 new Channel Partners.

In the Industrial and Consumer (I&C) business line, your Corporation recorded overall sales of 4.32 MMT. The strategy of maximizing volumes of Furnace Oil and Bitumen has helped in surpassing the 1.2 MMT and 1.5 MMT sales respectively in these products. Highest ever sales of 27 TMT were recorded in the speciality product line of Hexane. Your Corporation has forayed into marketing of Petrochemical products with the launch of the HP DURAPOL brand and has commenced sales of Polypropylene and Polyethylene in the key markets of Maharashtra and Gujarat. Your Corporation also launched new products like HP Super Solvent, LSHS Premium, Marine Bio Fuel and Warm Mix Additive with differentiated characteristics for meeting the unique needs of its customers. In order to widen the infrastructure reach, your Corporation started MTO rake unloading facilities at Dharmapuri and Vadodara, commissioned LDO rake receipt and Tank Truck loading facility at Haldia and Hexane tankages at Akola and Sitarganj depots.

In the Aviation business, your Corporation has achieved ATF sales of 693 TMT during FY 2022-23, registering a growth of 33.1% over the previous year. ASF network has now spread to 54 locations across the country by adding 5 nos. Air Force stations and two new locations of Kannur and Mopa during the year. HP Aviation was bestowed with the "Best Aviation Fuel Provider" award from ASSOCHAM. HP Aviation operates a

unique, single point 24 x 7 contact service ''HP Aviation Hub'' to meet the customers'' requirements and all its operations are as per the stringent global standards.

In the Gas business, your Corporation has marketed 257 TMT of Natural Gas, strengthening its presence in this business segment. Your Corporation is building City Gas Distribution (CGD) networks in 13 Geographical areas (GAs) in 7 States (viz. Haryana, Uttar Pradesh, Uttarakhand, Bihar, Rajasthan, Jharkhand and West Bengal). During the year, your Corporation has commissioned 86 new CNG stations in the GAs authorized to it, taking the total number of CNG stations in authorized GAs to 209. Additionally, 2110 inch-km of steel pipeline, 1233 KM of MDPE pipeline was added and 22,733 new PNG connections were released during the year. Your Corporation is also operating a network of one mother station and 18 daughter booster stations in and around the city of Ahmedabad. Currently, CNG is being dispensed through 1387 Retail Outlets on pan-India basis.

For import and regasification, your Corporation is building a 5 MMTPA LNG Regasification Terminal at Chhara Port in Gujarat through its 100% subsidiary, which has been mechanically completed in this year. Your Corporation has commenced gas supply to 19 new customers during the year and supplied 212 TMT of natural gas to these customers during the financial year. The Corporation is sourcing natural gas through various contracts, including a long-term gas sourcing contract from ultra-deep-water fields in KG Basin and other indigenous sources to meet its captive and marketing requirement. Your Corporation also commenced sourcing and marketing of gas through Indian Gas Exchange.

Supply, Operations & Distribution (SOD) Department of your Corporation ensures effective petroleum product distribution and marketing across India. Your Corporation has a robust supply chain and infrastructure of over 81 locations, ensuring seamless product movement with assured Quality and Quantity at optimum cost. Your Corporation achieved an all-time high thruput of 57.3 MMT in financial year 2022-23 with a growth of 13.9% and ensured uninterrupted product availability across the country. Your Corporation also achieved an overall ethanol blending percentage of 10.59%, exceeding the MoU parameters set by the GoI. It received recognition from CII for exemplary performance in improving ethanol logistics in the country. Your Corporation has leveraged technology for enhanced productivity with 64 ''SMART'' terminals in its network. Two new locations of Dharmapuri Terminal in Tamil Nadu and Sitar Ganj Depot in Uttarakhand were commissioned during the year and the Kozhikode Depot was recommissioned after a major revamp. To ensure correct quality and quantity of fuel delivered, your Corporation has installed upgraded Vehicle Tracking System with AIS-140 compliant devices and Electro Mechanical Locking systems for all Tank Trucks across all locations. Safety measures have also been undertaken to enhance safety in all operations, including interlocking of equipment and alarm systems, SOP-based training, and safe driving training for Tank Truck drivers.

Your Corporation''s Pipeline vertical has performed admirably by increasing its network to 5,132 KM with the commissioning of major pipeline projects of Hassan Cherlapally Pipeline (650 KM) and Vijayawada Dharmapuri Pipeline (697 KM). With these commissionings, petroleum-product-pipeline mainline capacity has gone up to 35.2 MMTPA. During the year, your Corporation has achieved all time high annual thruput of 23.25 MMT against previous year thruput of 19.91 MMT, thus registering a Y-o-Y growth of 16.8%. Your Corporation is further expanding the pipeline network and capacities for enhanced logistic efficiencies and associated environmental benefits. The major ongoing pipeline infrastructure projects include (i) Barmer Palanpur Pipeline (ii) Bathinda Sangrur Pipeline and (iii) Haldia Panagarh LPG Pipeline. These pipeline projects will increase HPCL''s pipeline capacity to over 40 MMTPA and network length to about 5,600 kilometres, thereby, significantly strengthening your Corporation''s position in key markets. Your Corporation has also teamed up with other PSU OMCs in development of India''s longest LPG pipeline from Kandla to Gorakhpur (2,805 km) through joint venture route.

Towards environmental protection and energy security of the nation, your Corporation is promoting biofuels in a big way. Your Corporation has successfully mechanically completed its first Biomass based Compressed Biogas (CBG) Plant located at Budaun, Uttar Pradesh. This CBG Plant has a processing capacity of 100 Tons/day (TPD) of lignocellulosic biomass which will produce about 14 TPD of CBG. During the year, your Corporation has achieved Ethanol blending of 10.59% by blending 129 crore litres of Ethanol in Motor Spirit (MS). Your Corporation has also sold 274816 KL of Biodiesel blended HSD. A new grade of Bio-marine fuel for bunker use has been launched by your Corporation. Your Corporation is actively participating in the Indian government''s SATAT initiative to promote CBG and has released Letters of Intent (LOIs) for setting up 63 CBG Plants during the year, taking the total number to 476 with capacity of 943 TMTPA. Your Corporation is also constructing a second-generation Ethanol bio-refinery in Bhatinda, Punjab. Additionally, your Corporation is setting up a waste-to-biogas plant at Yerada Park in Vizag, Andhra Pradesh and a CBG Plant of 100 TPD of cow dung processing capacity under the CSR scheme at Pathmeda, Rajasthan. Your Corporation has signed an MoU with National Agriculture Cooperative Marketing Federation of India (NAFED) for collaboration in biomass/feedstock sourcing and marketing of end products. The goal of these initiatives is to develop green and cleaner fuels, reduce waste, control pollution, promote organic farming, and provide additional income to farmers.

For leveraging Renewable energy (RE) sources to reduce the carbon footprints and electricity cost across the value chain, your Corporation has installed captive solar power capacity of 30.34 MWp across various locations during the year, taking the total solar power capacity to 84.355 MWp as of 31^st March,

2023. In wind power, 18.29 Crore KWh of electricity was generated through 100.90 MW of installed wind power capacity. Your Corporation has signed MoUs with the Government of Andhra Pradesh and NTPC Green Energy Ltd for collaboration in the renewable energy sector, paving the way for sizeable investments in Andhra Pradesh with a focus on solar and hybrid RE projects.

TREASURY MANAGEMENT

The year witnessed high international oil prices accompanied with policy tightening by central banks across the globe. This resulted in additional working capital requirement for your Corporation in an environment of increasing interest rate. Further, your Corporation is in the midst of high capex phase with major expansion plans in Visakh refinery and marketing locations, including cross-country pipelines.

The long term fund requirement was met through a mix of instruments including Non-convertible debentures aggregating to H 8,200 Crores, Term Loans from banks aggregating to H 7,300 Crores and ECB amounting to US$ 200 million; these loans were availed at very competitive rates.

Your Corporation effectively used a variety of borrowing instruments to optimize its cost of working capital. The shortterm borrowing requirements were met through Triparty Repo System, Clearcorp Repo Order Matching System, Commercial Papers and Revolving Line of Credit in USD, and Working capital facility from banks.

As of March 2023, your Corporation commands international long term issuer rating of "Baa3" with "Stable" outlook from Moody''s Investors Services, and "BBB-" with "Stable" outlook from Fitch Ratings. Both ratings are at par with sovereign rating.

Your Corporation continues to command highest domestic rating for long term ("AAA" with "Stable" outlook) and short term ("A1 ") facilities from CRISIL, India Rating and Research Private Limited and ICRA.

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate Internal Financial Controls for ensuring the orderly and efficient conduct ofits business including adherence to the Corporation''s 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 information, commensurate with the operation of your Corporation. As part of this exercise, the design of internal controls and its operating effectiveness for the key business processes is tested by reputed external consultant who observed that there are no material weaknesses in Internal Controls over Financial Reporting.

We operate in a dynamic environment which not only provides opportunities but also exposes the business to various risks. Your Corporation recognizes that all aspects of its business involve significant risks and that its actions are increasingly exposed to greater scrutiny by the public, regulators, investors, and its stakeholders. To proactively identify and manage key risks for achieving our strategic objectives and enable the Corporation to deal with these enhanced business challenges and risks, an effective and pragmatic risk management process has been institutionalized across the organization.

Your Corporation has updated the existing Enterprise Risk Management (ERM) framework by adopting the best practices recommended by international standards such as COSO ERM 2017 and ISO 31000:2018 Framework. The updated ERM Policy covers all types of risks impacting the strategic objectives and performance of the organization, including but not limited to - operational, regulatory, financial, sectoral, strategic, sustainability in particular ESG (Environmental, Social and Governance) related risks, information and cyber security related risks and business continuity plan. The aim is to integrate risk identification and management in the day-today management of the business, wherein risk is identified, assessed, continuously monitored, graded and managed to an acceptable level. Reputed professional external consultants have also been engaged to establish a mechanism to bring the outside view to effectively enhance the visibility of external business risks and support the change management in the transformation of existing ERM processes.

Your Corporation undertook workshops across SBUs and updated the risk registers in light of changing trends and risk areas. The Risk Management Committee meets periodically ( at least twice in a year) to ensure that appropriate methodology, systems and processes are in place to monitor these risks as well as monitor the progress of implementation of various mitigation steps. Additionally, The Board is also updated regularly on the risk assessment and mitigation procedures of the identified risk and a summary of the Board reportable risks is also placed before the Audit Committee for information. Keeping with global best practices, technology remains at the forefront to support the Enterprise Risk Management processes with a focus on optimizing risk exposures and automating risk reporting across the organization.

VIGILANCE

The Vigilance mechanism in your Corporation is based on the directives issued by the Central Vigilance Commission (CVC), Department of Personnel & Training (DoPT) and Ministry of Petroleum & Natural Gas (MoP&NG) from time to time.

The Vigilance Department is headed by the Chief Vigilance Officer (CVO) who administers supervision and control

of all the Vigilance matters in the Corporation. Vigilance Department carries out focused preventive vigilance activities which help in ensuring transparent business decisions by respective Departments.

Apart from conducting preventive vigilance activities, the major work areas of Vigilance comprise of investigation of complaints received from various sources like Citizens, Stakeholders, Central Vigilance Commission, Ministry of Petroleum & Natural Gas, Management and other sources etc.

The Vigilance Department deals mainly with matters related to corruption and matters having ''Vigilance angle'' as per Vigilance Manual (Updated 2021). The complaints are handled as per the complaint handling policy stipulated in the Vigilance Manual (Updated 2021) of the Central Vigilance Commission. There were 557 complaints disposed-off during the financial year 2022-23 and 30 complaints are pending as of 31.03.2023. These cases are related to Retail Outlet selection, Retail Outlet operations, LPG Distributorship selection, LPG Distributorship operations, tendering, transportation, Depot/Plant operations etc.

Various operating areas were reviewed for systemic improvements during the year. Apart from investigating complaints, surprise inspections of Depots, Terminals, LPG Plants, Regional Offices, LPG Distributors, Retail Outlets, Tank Trucks, Major Works (CTE Patten), Tender Review etc. were carried out. Various focused group-training programs were conducted for employees.

Vigilance Awareness Week was observed under the central theme for the year "Corruption Free India for a developed Nation". Various outreach activities viz., focused group presentations, Quizzes, Drawing/ Painting Competitions, Skits/ street plays, Workshops, Technical talks, Grievance redressal camps/ Awareness Gram Sabhas, Rallies/ Walkathons, School/ College Programs etc. were undertaken during the week to spread awareness among citizens/stakeholders and employees.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Corporation, being a Government Company, is subjected to the CVC Guidelines and the Corporation has a separate Vigilance Department administering the Vigilance matters. Your Corporation has a Whistle Blower Policy approved by the Board and the same is placed on the website of the Corporation. The web link of Whistle Blower Policy is stated herein below:

Web link: https://www.hindustanpetroleum.com/documents/ pdf/Whistle Blower Policy.pdf

RIGHT TO INFORMATION (RTI)

Your Corporation being a public authority has a structured mechanism in place to deal with matters related to the RTI Act in line with the provisions under the Right to Information Act,

2005. Your Corporation has aligned with the Online RTI portal of DoPT, Government of India and all RTI applications/ First appeals received through the portal are handled through the portal itself, including the physical applications received offline. The mandatory reports such as Quarterly/ Annual reports are submitted periodically within the stipulated timelines onto the website of the Central Information Commission (www.cic.gov. in). In addition, as required under the Act, all the relevant details and information mandated through suo - motu disclosures under Section 4 (1) (b) have also been hosted on the Corporate website (www.hindustanpetroleum.com) for the purpose of transparency and better understanding by the public at large.

Your Corporation has a designated Nodal Officer at its Headquarters'' Office to coordinate, facilitate and oversee implementation of RTI Act. The RTI applications are addressed on the Online RTI Portal (www.rtionline.gov.in) within the stipulated time period of 30 days. A team of 225 Central Public Information Officers (Regional Managers and HoDs who predominantly constitute as CPIOs ) and 42 First Appellate Authorities (Senior Management who constitute FAAs ) spread across the country, covering Refineries, major SBUs like Retail and LPG and other Departments ensure seamless and effective handling of the RTI applications received.

During the financial year 2022-23, your Corporation has successfully handled and processed 2892 RTI applications, 391 First Appeals and 93 Second appeals [CIC (Central Information Commission) Hearings]. All the 93 CIC Hearings were held thru VC by the Hon''ble CIC while the CPIOs were physically present in respective NIC studios located at various District Collectorate offices, wherein the detailed Written Submissions were submitted in time to the Hon''ble CIC for all the Hearings, to enable CIC to pass awards.

INDUSTRIAL RELATIONS

Your Corporation has continued to enjoy excellent Employee Relations during the year with no reported instance of industrial unrest at any of its operating locations. Your Corporation lays great emphasis on continually engaging, enabling and empowering its stakeholders through a variety of interventions. Your Corporation is happy to inform that a New Career Development Policy was signed with the Unions representing non-management employees under Marketing Division, during financial year 2022-23. Your Corporation could also successfully conclude discussions with the Unions, on modifications of various clauses of Certified Standing Order of Mumbai Refinery with a view to imbibe discipline at workplace. It is also a matter of great pride for the Corporation that under the aegis of Central Vigilance Commission, your Corporations'' in-house faculties conducted Training Programs for IOs/POs on Departmental Enquiries for various CPSEs/Government Organisations.

Your Corporation demonstrated strong sense of Corporate Responsibility by travelling beyond statutory requirements as

recently evidenced in coverage of all our direct and indirect stakeholders with Medical Insurance coverage, Ex-Gratia compensation in case of untoward accidents, organizing special medical camps, etc., even post pandemic. Also, towards further improving engagement levels of outsourced workers in Corporation & encourage the meritorious children, a "Merit Scholarship Scheme" was introduced during the financial year for grant of one-time Scholarship to meritorious children of contract workers who passed 10^th / 12^th or Diploma / Degree.

OFFICIAL LANGUAGE IMPLEMENTATION

The usage of Hindi is ensured in the business of your Corporation by motivating the employees through persuasion, incentive and harmony and Hindi is being promoted by utilizing various facilities available in the field of Information & Technology including Video Conferencing. To promote the linguistic talent of the employees, awareness about Hindi is created in the offices through on-line Hindi Competition, Hindi Fortnight, Official Language Conferences and Hindi Workshops etc.

During the financial year 2022-23, your Corporation was conferred with ''Petroleum Rajbhasha Shield - First Prize'' for implementation of Official Language for the year 2021-22 by MOP&NG. This award is given for the best performance in the field of OLI (Official Language Implementation) amongst Oil PSUs. Your Corporation is coordinating Town Official Language Implementation Committee (TOLIC) of Mumbai based PSUs since 1983 and thereby guiding 65 Mumbai based PSUs in the field of Official Language Implementation. Other than the TOLIC Meetings, your Corporation has trained the officials of different PSUs by conducting various programs such as Hindi Translation, Promotion of Hindi and Regional Language etc.

Your Corporation has maintained its record in the entire Oil Industry by receiving 57 Rajbhasha Awards from Government of India and other Agencies.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation has always strived to be a model of excellence and a catalyst of transformation in all its endeavors, be it business prosperity or its commitment to the society. Your Corporation has always believed in creating shared values and Delivering Happiness through its various initiatives that have touched millions of lives.

Your Corporation implemented various activities under the focus areas of Child Care, Education, Health Care, Skill Development, Sports, Environment & Community Development, Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government; and Contributions to public funded Universities.

As a responsible Corporate Citizen, your Corporation implemented more than 100 CSR projects under the annual common theme ''Health Care'' in line with Guidelines on CSR Expenditure by Department of Public Enterprises, Government of India. Across the country, various medical devices and equipment were procured and provided to Primary Healthcare Centers, Community Healthcare Centers, District Hospitals to meet the grassroot healthcare needs in local and remote areas surrounding our business locations like Terminals, Depots, LPG Plants, Pipelines, Aviation Stations, Lube Blending Plants etc. among others.

During the year, your Corporation under Project ''ADAPT'', endeavored to enhance the quality of lives of Children with Special Needs (CwSN) through education, individual training and therapeutic treatment.

Under Project ''Nanhi Kali'', adolescent girls were provided with remedial classes, material kits, sports curriculum training and counselling sessions on personal hygiene and career development.

Your Corporation distributed more than 16,000 Scholarships to students from various socially-economically disadvantaged sections like SC, ST, OBC and PwD across the country, giving support to the students for their Education from School-Level to Professional courses. Your Corporation has also provided basic facilities like furniture items, teaching aids, water coolers etc. in various schools for benefit of students in rural areas.

Your Corporation continued its collaboration with Indian Army for Project ''Kashmir Super-50 Medical''. Under the project, aspiring students from Union Territory (UT) ofJammu & Kashmir are provided mentoring and coaching for Medical stream. This residential training program gives wings to academic aspirations of youth for their career development.

Your Corporation also reached out to the last mile and collaborated with Indian Army for Project Ladakh Ignited Minds Super- 45 ''Medical & Engineering'' for the less-privileged students of UT of Ladakh. Under this project, your Corporation supports the Indian Army''s initiative in ''Winning Hearts and Minds'' of the local population. This project supports the less-privileged yet aspiring students of Ladakh Region in enabling them to compete in various streams like Engineering, Medical and other career-oriented programs.

The year saw commencement of similar residential project in Kargil District of UT of Ladakh exclusively for girl students and in Rajouri District, UT of Jammu & Kashmir for coaching the deserving youth in streams like Engineering, Medical and other career-oriented programs.

To provide basic healthcare facilities in remote rural areas, Mobile Medical Vans were operated under ''Project Dhanwantari'' to provide diagnosis, treatment and health awareness at the doorsteps of less privileged people.

Under Project ''Dil without Bill'', support was extended for conducting heart surgeries of beneficiaries from lower-economic section with special focus on children.

Your Corporation supported Skill Development Institute (SDI) conceptualized by Government of India and operationalized by Oil & Gas CPSEs focused on imparting skills in industry-oriented trades for improving employability of weaker sections of the society. SDI Visakhapatnam is being managed by your Corporation along with support of other Oil & Gas CPSEs. More than 3,800 students were trained in various trades for their employment enhancement at SDI Visakhapatnam.

During the year, your Corporation commenced the work towards establishment of Compressed Bio - Gas (CBG) Plant at Village Pathmeda, District Jalore, Rajasthan. It is envisaged that this project shall provide purified Bio-Gas in rural areas which shall be produced from Waste / Bio-mass sources like agricultural residue, cattle dung etc.

Your Corporation supported the Har Ghar Tiranga Campaign (13^th- 15^th August, 2022) by providing National Flags to school students and general public in cities and villages, encouraging the spirit of patriotism under the aegis of ''Azadi Ka Amrit Mahotsav''.

During Swachhta Pakhwada Campaign (1^st - 15^th July, 2022), there was outreach of more than 20 Lakh stakeholders across the country. Various awareness generation activities were undertaken, like administration of Cleanliness pledge, providing Masks and Hygiene kits to support fight against Covid-19. Pitching of seed balls and Sapling Plantation was carried out to promote green environment along with various competition on Slogan Writing, Elocution, Drawing etc. under the theme of ''Swachhta''.

Contribution was made to the Armed Forces Flag Day Fund for the care, support, welfare and rehabilitation schemes for ExServicemen (ESM) and their dependents.

Awards & Accolades:

â¢ Your Corporation declared as ''Winner'' under the Category ''1.1: Companies having eligible CSR Spend equal and above H 100 Cr'' of National CSR Awards 2020 instituted by Ministry of Corporate Affairs, Government of India.

â¢ Your Corporation conferred with ''Honorable Mention'' for ''Project Dhanwantari'' under the Category ''3.4: Health, Safe Drinking Water and Sanitation'' of National CSR Awards 2020 instituted by Ministry of Corporate Affairs, Government of India.

â¢ Your Corporation bagged prestigious Award for Swachhta Pakhwada Campaign (1^st - 15^th July, 2022) instituted by Ministry of Petroleum and Natural Gas.

â¢ Your Corporation bagged ''Best CSR Integrated Business'' for embedding CSR as part of Business Operations by ''ET Ascent National Award for Excellence''.

â¢ Your Corporation emerged as ''Winner'' of Leadership Award 2022'' for Project Kashmir Super-30 Medical - Education Adding Value to the Local Community (Education, Health, Sports) at 11^th India CSR Awards instituted by India CSR Network.

â¢ Your Corporation emerged as ''Winner'' of 9^th CSR India Awards 2022 under the category ''Welfare of Divyangs'' instituted by Greentech Foundation.

â¢ Your Corporation emerged as ''Winner under category: CSR Commitment (Overall)'' of 9^th PSU Awards instituted by Governance Now.

â¢ Your Corporation won 1^st Runners-up of ''CSR & Sustainability Award'' at 12^th PSE Excellence Awards & Conclave instituted by Indian Chamber of Commerce (ICC).

The details of CSR activities of the Corporation containing details of CSR Committee Members (as of 31^st March 2023), brief outline of the CSR policy, overview of the CSR initiatives, prescribed expenditure, amount spent etc. that form part of this Report are furnished in Annexure III.

The Current composition of CSR Committee is as follows:

Sl. No.	Name	Category
1	Shri Ramdarshan Singh Pal	Independent Director	- Chairman
2	Smt Vimla Pradhan	Independent Director	- Member
3	Shri Bechan Lal	Independent Director	- Member
4	Shri S. Bharathan	Whole Time Director	- Member
5	Shri Amit Garg	Whole Time Director	- Member
6	Shri K S Shetty	Whole Time Director	- Member

CORPORATE GOVERNANCE

Your Corporation continues to adopt the best practices of Corporate Governance to ensure transparency, integrity and accountability in its functioning. The Corporate Governance Report highlighting these endeavours has been incorporated as a separate section that form part of the Annual Report for financial year 2022-23.

PROCUREMENT OF GOODS & SERVICES FROM MSEs

25% of its total requirements from MSEs and within it, 4% of total requirement has been earmarked for procurement from MSEs owned by SC/ST entrepreneurs, and another 3% from women entrepreneurs. For the benefit of MSEs, the MSE procurement details are regularly uploaded on Sambandh Portal of Ministry of MSME, besides displaying the Annual Procurement Plan on the Corporation''s website.

Against the above set target for financial year 2022-23, your Corporation has achieved 38.97% (H 3472.43 Crore) of procurement of goods & services from MSEs excluding items which are beyond the scope of MSEs. The excluded items are Crude Oil, Petroleum Products, logistics cost through shipping, Railways & Pipelines, LNG/Natural Gas, API Line pipes, OEM spares & services, proprietary items and services, Technology Licenses and Licensor mandated items, Plant & Machinery and single item value equal to or more than H 50 Crore. To promote the objectives of procurement from MSEs as laid down in Public Procurement Policy, 71 Vendor Development Programs/ Buyer-Supplier meet for MSEs were conducted during the financial year. During these meets, the Corporation''s procurement processes were articulated through detailed presentation to MSE vendors with an intent to increase awareness of vendor registration process, tendering process, availability of TReDS platform, procurement on GeM platform etc. Implementation of various Government directives/policies of providing relief to MSMEs and promoting indigenization of products and services was also explained during the programme.

Your Corporation is registered with TReDS Digital platform, an institutional mechanism set up by Reserve Bank of India, to facilitate the trade receivable financing of Micro Small and Medium Enterprises (MSMEs) from corporate buyers through multiple financiers. Integrating its ERP System with that of 3 of the service providers, namely; A.Treds Ltd., Mynd Solutions Pvt. Ltd. and Receivables Exchange of India Ltd., the Corporation has enabled the MSMEs to auction their trade receivables at competitive rates through online bidding by financiers. Numerous MSME vendors have on-boarded this platform and benefitted with the bill discounting facility that provides liquidity.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Corporation has ensured compliance with various provisions under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. To inculcate appropriate workplace behaviour and promote gender sensitization, your Corporation mandated all its executive employees to undergo awareness sessions through online courses and workshops conducted on the subject. Internal Committee (IC) of the Corporation were reconstituted and detailed guidelines on procedures relating to the functioning of the IC were circulated.

Management Discussion & Analysis Report forms part of the Annual Report for FY 2022-23.

FINANCIAL STATEMENTS OF SUBSIDIARIES

In terms of Proviso to Section 136(1) of the Companies Act, 2013, your Corporation will place separate audited Financial Statements in respect of each of its Subsidiary Company on its website and also provide a copy of separate audited Financial Statements in respect of each of its Subsidiary Companies to any Shareholder of the Corporation who seeks the same. The Financial Statements of the Subsidiary Companies will also be kept open for inspection at the registered offices of the Corporation/respective Subsidiary Companies.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013, a separate statement containing salient features of the Financial Statements of Subsidiary/Associate/Joint Venture Companies in Form AOC-1 is attached along with the Consolidated Financial Statements.

COST AUDIT

The maintenance of Cost Records, as specified under Section 148(1) of the Companies Act, 2013 is mandated and accordingly such accounts and records are made and maintained. The Cost Audit for FY 2021-22 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs within the stipulated time for filing.

DIRECTORS

Your Corporation''s Board presently comprises 13 Directors.

The Whole Time Directors are Shri Pushp Kumar Joshi (Chairman & Managing Director), Shri Rajneesh Narang (Director - Finance), Shri S. Bharathan (Director - Refineries), Shri Amit Garg (DirectorMarketing) and Shri K S Shetty (Director - Human Resources).

The Government Nominee Directors are Smt. Sujata Sharma, Joint Secretary (M&OR) in Ministry of Petroleum & Natural Gas (MOP&NG) and Shri Pankaj Kumar, Director (Production) of Oil and Natural Gas Corporation (ONGC).

The Independent Directors are Smt. Vimla Pradhan, Shri Bechan Lal, Shri Vivekananda Biswal, Shri Ramdarshan Singh Pal, Dr. Nagaraja Bhalki and Shri K S Narendiran.

As per the provisions of Section 152 of the Companies Act, Shri Rajneesh Narang is the Director who is liable to retire by rotation at the next Annual General Meeting and being eligible offer himself for re-appointment.

DETAILS OF CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) DURING FY 202223 AND TILL DATE

A) Directors

â¢ Shri Rakesh Misri, Director - Marketing (Whole Time Director) has ceased to be Director of your Company effective April 01, 2022 on attaining the age of superannuation.

â¢ Shri Mukesh Kumar Surana, Chairman & Managing Director (Whole Time Director) has ceased to be Director of your Company effective May 01, 2022 on attaining the age of superannuation.

â¢ Shri Pushp Kumar Joshi, Director- Human Resources (Whole Time Director) was appointed as Chairman & Managing Director w.e.f. May 08, 2022. He was also holding additional charge of Director-Marketing from April 01,2022 till December 26, 2022.

â¢ Shri Rajneesh Narang, Director-Finance was holding additional charge of Director-Human Resources from May 08, 2022 till April 30, 2023.

â¢ Shri Pankaj Kumar, Director-Production, ONGC, was appointed as Government Director of the Company effective June 22, 2022.

â¢ Shri G Rajendran Pillai has ceased to be an Independent Director of the Company effective July 15, 2022 on completion of tenure of office of 3 years on July 14, 2022.

â¢ Shri Vinod S Shenoy, Director-Refineries (Whole Time Director) has ceased to be Director of your Company effective October 01, 2022 on attaining the age of superannuation.

â¢ Shri S. Bharathan was appointed as Director-Refineries (Whole Time Director) on the Board of your Company effective October 01,2022.

â¢ Shri Amit Garg was appointed as Director-Marketing (Whole Time Director) on the Board of your Company effective December 27, 2022.

â¢ Shri Sunil Kumar,Joint Secretary-Refineries, MOP&NG, Government Nominee Director (Representative of MOP&NG) has ceased to Director of the Company effective December 27, 2022.

â¢ Smt. Sujata Sharma, Joint Secretary, (M&OR), MOP&NG, was appointed as Government Nominee Director (Representative of MOP&NG) on the Board of your Company effective December 27, 2022.

â¢ Shri K S Narendiran was appointed as an Independent Director on the Board of your Company effective March 15, 2023.

â¢ Shri K S Shetty was appointed as Director-Human Resources (Whole Time Director) on the Board of your Company effective May 01,2023.

B) KMP

During the financial year 2022-23, apart from the details of changes as covered in ''A'' above, there were no change in the other Key Managerial Personnel.

C) Resignation of a Director who resigns from his office by giving a notice in writing to the Company

During the year, there were no cases observed where Directors resigned from their office by giving a notice in writing to the Company.

NUMBER OF MEETINGS OF THE BOARD

During financial year 2022-23, 12 Board Meetings were held. The details of these Meetings are given in the Corporate Governance Report for the financial year.

MANAGERIAL REMUNERATION

By virtue of MCA Notification dated 5^th June 2015, Government Companies are exempted from complying with the requirement of Section 197 (Chapter XIII) of the Companies Act, 2013. Hence, the Rules made thereunder i.e. Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is also not applicable to Government Companies.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Your Corporation being a Government Company, the compliance of Section 134 (3) (p) is exempted by virtue of MCA Notification dated 5^th June 2015 as the annual evaluation of the performance of the Board, its Committees and of Individual Directors are carried out by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MOP&NG).

DECLARATION BY INDEPENDENT DIRECTORS

Statement of declarations as required under Section 149(7) of the Companies Act, 2013 & Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been obtained from the Independent Directors.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Corporation, being a Government Company is exempted to furnish information under Section 134(3)(e) of the Companies Act, 2013 vide MCA Notification dated 05^th June 2015.

OPINION OF BOARD REGARDING INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTOR APPOINTED DURING THE YEAR

Your Corporation, being a Government Company, all the Directors including Independent Directors are appointed by Government of India.

Independent Directors are selected by search committee constituted by Government of India from mix of eminent personalities having requisite expertise and experience in diverse fields.

During the Financial Year 2022-2023, 1 Independent Director was appointed on the Board. This Director has registered himself with Independent Directors Databank maintained by Indian Institute of Corporate Affairs (IICA) of Ministry of Corporate Affairs. Out of 6 Directors, Shri Vivekananda Biswal is exempted from undergoing Proficiency Test by virtue of proviso of Rule 6 (4) of Companies (Appointment and Qualification of Directors) Rules, 2014. Other 5 Independent Directors can undergo test within a period of 2 years from the date of their inclusion of names in the Independent Directors'' databank.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

Your Corporation, being a Government Company, the remuneration payable to Key Managerial Persons and other employees are fixed by the Government of India. However, payment like Performance Related Pay is placed for the approval of Nomination and Remuneration Committee.

AUDIT COMMITTEE

The present composition of Audit Committee, which requires reporting under Section 177(8) of the Companies Act, 2013 is given as under:

Sl. No.	Name	Category
1	Shri Bechan Lal	Independent Director	- Chairman
2	Shri Vivekananda Biswal	Independent Director	- Member
3	Shri Ramdarshan Singh Pal	Independent Director	- Member

C&AG AUDIT

C&AG''s comment upon or supplement to the Statutory Auditors'' Report on the Accounts for the year ended 31^st March, 2023 is attached along with Financial Statements. Further, as at 31^stMarch, 2023, there are 8 pending paras related to the C&AG audit. These relate to encashment of Earned Leave/Half Pay leave/Sick Leave as well as Employer''s share of EPF contribution on leave encashment; non-recovery of perquisite tax; payment of shift allowance to executives; payment of stagnation reliefs; non-recovery of dues in a case of bank guarantee, not encashed; additional expenditures due to non-utilisation of pipeline in economical manner; infructuous expenditure incurred on creation of certain facilities; opportunities foregone to conserve energy. The audit observations have been suitably replied.

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the financial year 2022-23 in Form No. AOC-2 is annexed herewith and marked as Annexure V.

WEB LINK OF ANNUAL RETURN

Web link of Annual Return (MGT-7) is available at https://www. hindustanpetroleum.com/AGMDetails

PARTICULARS OF EMPLOYEES

The details regarding the number of women employees vis-a-vis the total number of employees is given herein under:

Group	Total No. of Employees	No. of Women Employees	% of Women Employees
Management	5818	715	12.29%
Non Management	2686	168	6.25%
TOTAL	8504	883	10.38%

Shri Rajneesh Narang, Whole Time Director is a permanent Invitee to the Committee.

The Changes in the Composition of Audit Committee during the financial year 2022-23 and till date are:

â¢ Shri G Rajendran Pillai, Independent Director, Chairman of the Audit Committee had held this post till he ceased to be Director of the Company effective 15^th July 2022.

â¢ Shri Bechan Lal, Independent Director, member of the Audit Committee became Chairman of the Committee effective 15^th July 2022.

â¢ Shri Ramdarshan Singh Pal was inducted into the Committee as Member effective 15^th July 2022.

During the year, there were no cases observed where Board had not accepted the recommendations of Audit Committee. The recommendations of Audit Committee are broadly accepted by the Board.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has appointed M/s. Ragini Chokshi & Co., a firm of Practicing Company Secretaries to undertake Secretarial Audit of the Company for the Financial Year 2022-2023. The Report of Secretarial Auditor in Form No. MR-3 is annexed herewith and marked as Annexure IV.

The Report does not contain qualification, reservation or adverse remark except the following:

The Company could not comply with the provisions of Regulation 17 (1) of SEBI LODR, 2015 for having requisite number of Independent Directors on its Board with effect from 27-12-2022 upto 14-03-2023.

In this regard, your Company confirms that being a Government Company, which is under the Administrative Control of Ministry of Petroleum and Natural Gas (MOP&NG), the power to appoint Directors (including Independent Directors) and finalizing the terms and conditions of appointment vest with Government of India. The matter regarding appointment of required number of Independent Directors has been taken up with MOP&NG from time to time and the Government is seized of the matter.

COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS

Your Corporation has complied with applicable Secretarial Standards in respect of Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).

REPORTING OF FRAUDS BY AUDITORS

During the year under review, Auditors have not reported to the Audit Committee (under Section 143 (12) of the Companies Act, 2013) any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board''s report.

DETAILS OF EACH OF THE FRAUD REPORTED TO THE AUDIT COMMITTEE OR THE BOARD DURING THE YEAR - NIL

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Corporation that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

During the financial year, no application has been made or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

There are no instances of one-time settlement done with banks/ financial institutions during the financial year.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The details on the performance and financial position of Subsidiary, Associate and Joint Venture Companies are given in Management Discussion & Analysis Report. Further, pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of Financial Statements of Subsidiary, Associate and Joint Venture Companies in Form No. AOC-1 form part of the Annual Report for FY 2022-23, separately.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATES

There are no instances of companies which have become or ceased to be your Corporation''s Subsidiaries, Joint Ventures or Associate companies during financial year 2022-23.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During financial year 2022-23, your Corporation has not received any Order or Direction of any Hon''ble Court or Tribunal or Regulator, which either affects your Corporation''s status as a going concern or which substantially or significantly affects your Corporation''s business operations.

DETAILS OF DEPOSITS

Your Corporation has not been accepting any Deposits, as specified in Section 73 to Section 76 of the Companies Act, 2013 and therefore there do not call for any disclosure of Deposits as required under Rule 8(5)(v) of Companies (Accounts) Rules, 2014.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed that:

i. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

ii. The Directors have 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 the profit and loss of the Company for that period.

iii. The Directors have 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.

iv. The Directors have prepared the Annual Accounts on a going concern basis.

v. The Directors, have laid down internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively.

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Board of Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, State Governments and various statutory and local authorities.

The Directors also wish to thank all dealers and distributors spread all over the Country and the HP- Pariwar for reposing their faith, trust and confidence in the Corporation towards improving the service to the valued Customers as well as for the overall performance of the Corporation.

The employees of the Corporation have continued to display their total commitment towards the pursuit of excellence. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Corporation to scale even greater heights.

Your Directors are thankful to the Shareholders for their faith and continued support in the endeavors of the Corporation.

Mar 31, 2022

On behalf of the Board of Directors, it gives me immense pleasure in presenting this Report on the performance of your Corporation for the financial year ended March 31,2022.

The year 2021-22 has been remarkable with world economies recovering back strongly from the lows of COVID-19 Pandemic on improved vaccine coverage and ability of man-kind to raise up to challenges. The energy consumption, a key indicator of economic activity staged a smart comeback with consumption gradually moving towards pre-pandemic levels.

Your Corporation reported its highest ever Annual sales revenue of H 3,72,642 Crore, a remarkable growth of 38% with a Profit after Tax of H 6,383 Crore and in its exciting journey, accumulated several prestigious awards during the year including "Oil Marketing Company of the Year" for second consecutive year.

HIGHLIGHTS	(H / Crore) Consolidated Standalone
	2021-22	2020-21		2021-22		2020-21
FINANCIAL PERFORMANCE
Sales/Income from Operation	3,72,867.94	2,69,493.69		3,72,641.60		2,69,242.86
Earnings before Interest, Tax, Depreciation & Amortization and Exceptional items	14,141.30	18,785.75		13,145.54		18,714.17
Depreciation & Amortization Expenses	(4,000.36)	(3,625.47)		(3,969.1 1)		(3,552.65)
Finance Cost	(997.32)	(963.28)		(972.73)		(914.73)
Profit before Tax (PBT)	9,143.62 (1,849.39)	14,197.00 (3,534.11)		8,203.70 (1,821.07)		14,246.79 (3,582.91)
Tax Expenses
Profit after Tax (PAT)	7,294.23	10,662.89		6,382.63		10,663.88
Balance brought forward from previous financial year	36,068.83	27,485.23		34,271.39		25,394.07
Amount available for Appropriation
Appropriations/ Others:
Debenture Redemption Reserve (net)	(2.11)	(33.84)		-		-
Dividend	(3,227.20)	(1,485.72)		(3,227.20)		(1,485.72)
Other Comprehensive Income that will not be reclassified to profit or loss(net of tax)	132.27	(88.95)		129.55		(92.23)
Utilisation for shares buy-back	(932.39)	(208.61)		(932.39)		(208.61)
Other Appropriations	(33.47)	(262.17)		(33.47)		-
Balance carried forward	39,300.16	36,068.83		36,590.51		34,271.39
SHAREHOLDERS'' VALUE (K)
Earnings per Share	51.36	70.57		44.94		70.57
Cash Earnings per Share	83.24	94.21		76.40		94.06
Book Value per Share	291.88	262.26		272.65		249.21

PHYSICAL PERFORMANCE (MMT)			2021-22		2020-21
Market Sales (including Exports)#			39.14		36.59
Crude Thruput:
Mumbai Refinery			5.56		7.37
Visakh Refinery			8.41		9.05
Total Crude Thruput			13.97		16.42
# As per Ind AS

SALES/INCOME FROM OPERATIONS

Your Corporation has achieved Sales/Income from Operations of H 3,72,641.60 Crore in the financial year 202122 as compared to H 2,69,242.86 Crore in the financial year 2020-21 on a standalone basis.

PROFIT

Your Corporation has reported Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) of H 13,145.54 Crore in the financial year 2021-22 as against H 18,714.17 Crore in the financial year 2020-21 and Profit after Tax of H 6,382.63 Crore in the financial year 2021-22 as compared to H 10,663.88 Crore in the financial year 2020-21 on a standalone basis.

DIVIDEND

The Board of Directors, after taking into account the Financial Results of the Corporation during the financial year, have recommended a final dividend of H 14 per share for the financial year 2021-22 as compared to H 22.75 per share for the financial year 2020-21. The amount of final dividend as recommended by the Board totaling to H 1,985.97 Crore will be paid out of profits earned for the financial year.

INTERNAL RESOURCES GENERATION

Your Corporation has generated Internal Resources (net of dividend payout) of H 7,622.63 Crore during the financial year 2021-22 as compared to H 12,727.53 Crore during the financial year 2020-21 on a standalone basis.

CONTRIBUTION TO EXCHEQUER

Your Corporation has contributed a sum of H 85,745.58 Crore to the exchequer during the financial year 2021-22 by way of duties and taxes, as compared to H 95,332.94 Crore during the financial year 2020-21 on a standalone basis.

REFINERY PERFORMANCE

FY 2021-22 witnessed your Corporation''s Mumbai refinery enhancing its crude processing capacity from 7.5 MMTPA to 9.5 MMTPA by successfully and safely executing a very complex revamp of major processing units as part of the Mumbai Refinery Expansion Project (MREP) in spite of challenges posed by multiple waves of COVID-19 pandemic. The project included battery limit and flare shutdown for integration of the new units with the existing units, commissioning of New Vacuum Pipe Still (NVPS) and New Hydrogen Generation Unit (NHGU), revamp of Fuel Refinery Atmospheric Pipe Still (FR APS), Motor Spirit (MS) block and Diesel Hydrotreating Units (DHT). The revamp involved precise planning and significant work across various discipline like civil, structural, piping, electrical, equipment replacement / modification etc. Various stakeholders such as employees, contractors, OEM representatives, licensor

consultants and PMC engineers were involved during various stages of the project. Post stabilization of newly commissioned units, Mumbai Refinery registered highest monthly and quarterly crude thruput in the month of January 2022 and Q4 of FY 2021-22 respectively.

FY 2021-22 also witnessed your Corporation''s Visakh refinery delivering robust physical performance by recording capacity utilization of more than 100%. Visakh Refinery Modernization Project (VRMP) to enhance crude processing capacity from 8.3 MMTPA to 15.0 MMTPA is progressing well and mechanical completion for units have commenced in a phased manner. Implementation of Residue Upgradation Facility (RUF) is also progressing well. A major milestone of erection of 3 nos. LC Max Reactors and 2 nos. of Hydrotreater (HDT) Reactors was achieved during the year. This includes erection of world''s heaviest De-Asphalted Oil (DAO) LC Max reactor which weighs in excess of 2200 MT.

Towards augmentation of storage infrastructure and enhancement of flexibility for product handling, Mumbai refinery commissioned new tanks at MR-II facility and implemented Naphtha and MTO loading facility ex Mahul terminal. Visakh refinery achieved mechanical completion for Tankage-B package and as part of Sagarmala project at Oil Wharf, commissioned Bitumen shipping line to OR-III jetty during the year.

During the FY 2021-22 refineries registered combined refining throughput of 13.97 MMT as compared to 16.42 MMT during the previous year. Combined capacity utilization of refineries was about 88.4%. A planned shutdown of Mumbai refinery was undertaken in Q1 of FY 2021-22 for implementation of the revamp project.

Environmental protection continues be a top priority for refineries. Mumbai refinery continued to source more than 70% of its power requirement from the grid. Visakh refinery executed project for connecting refinery power grid to 220KV as part of VRMP.

Your Corporation is in the process of developing a validated roadmap with the help of a world-renowned consultant to achieve net zero Scope 1 and 2 emissions by the year 2040. Your Corporation was the first Oil Marketing Company to place an order for Electrolyser to produce Green Hydrogen. A 2.6 MW Electrolyser will be installed in Visakh Refinery to produce 370 TPA of Green Hydrogen.

To further enhance refining capacity, a new 9 MMTPA grass root Refinery cum Petrochemical Complex is being setup by HPCL Rajasthan Refinery Limited (HRRL), a joint venture company between HPCL and Government of Rajasthan at Pachpadra in Barmer District of Rajasthan. HRRL has achieved significant progress during the FY 2021-22 in spite of several constraints posed by the COVID-19 pandemic. Construction of various facilities such as warehouse, boundary wall, bund wall, major roads and water reservoir for construction purpose etc., have been completed. Purchase Orders for key Long Lead Items (LLIs) have been placed. Engineering, Procurement and Construction activities of key process

units and Lump Sum Turn Key (LSTK) packages for various utilities and associated facilities are progressing well.

OPERATING PERFORMANCE OF REFINERIES

Parameter	Unit	Mumbai	Visakh
		Refinery	Refinery
Crude Thruput	TMT	5,558	8,410
Capacity utilization	%	74.1	101.3
Distillate yield	%	70.4	70.7
Fuel & Loss	%	8.33	8.09
Specific Energy	MBTU/	106.7	85.0
Consumption	BBL/ NRGF
Gross Refinery Margin	$/BBL	7.60	6.92

MARKETING PERFORMANCE

Recording a sale of 39.14 MMT, including exports (FY2020-21: 36.59 MMT), your Corporation has performed excellently during FY 2021-22. In the domestic segment, your Corporation recorded a volume of 37.42 Million Tonnes (2020-21: 35.24 MMT) with a growth of 6.1% over previous year and achieved a market share of about 20.9% amongst public sector Oil Marketing Companies (OMCs). This significant feat was achieved notwithstanding the economic turbulence during the year, challenges associated with the two COVID-19 waves and the geo-political conflict leading to demand destruction and soaring crude prices.

In the motor-fuel segment, your Corporation achieved a sales volume of 22.9 MMT in FY 2021-22 with a market share gain of 0.09% on a Total Motor Fuels on industry basis (PSU Private). During the year, 1391 Retail Outlets were commissioned (taking the total to 20,025) and 273 Door-to-Door Mobile Dispensers were commissioned, totalling to 660 nos. Not just conventional fuels, your Corporation is also at the forefront in meeting alternate fuels requirement and providing more options to customers. CNG facilities have been provided at 413 outlets during FY 2021-22 taking the total to 1087 outlets and EV Charging Facilities are now available at 1011 Retail Outlets. Thus, your Corporation achieved the triple milestone of crossing 20,000 mark in numbers of Retail Outlets and 1000 outlets mark each offering CNG and EV Charging facilities during the year. To enhance customer satisfaction, the HPCL-ICICI Super Saver card was launched. In-house ''HP Pay'' wallet has been integrated with WhatsApp wherein basic features of LPG booking, paycode generation etc. have been enabled. "Instafuel", a new video analytics based vehicle identification system coupled with preset functionality in the HP Pay App, has been successfully implemented to provide faster, convenient and 100% contactless payments at retail outlets.

All these significant efforts have resulted in achieving 42.7% of the total collections through digital modes in Total Motor Fuels (TMF) sales in the month of March 2022. During the year, Retail SBU of your Corporation forayed into nonfuel retailing by launching branded store Club HP "HaPpy Shop" at retail outlets. Further, own branded packaged drinking water under the brand name "Paani@Club HP" was also launched.

In the LPG business vertical, your Corporation set a new record in FY2021-22 with sales of 7.7 MMT, recording a growth of 4.4% over the previous year. ''HP Gas'' has enrolled over 39 lakh new customers during the year which includes 25 lakhs customers under ''Pradhan Mantri Ujjwala Yojna (PMUY 2.0)''. To meet the rising demand in North East India, a 30 TMTPA Bottling plant was commissioned at Goalpara, the first HPCL bottling plant in the State of Assam. Your Corporation has commissioned the 120 TMTPA capacity LPG Plant at Gonda, Uttar Pradesh and an additional 5.5 TMT of LPG Mounded Storage Vessels at various locations. In the FTL sales segment, your Corporation could further boost ''HP Gas'' market dominance by selling over 4.4 million ''APPU'' cylinders in package sizes of 5 kg and 2 kg, thereby maintaining its leadership in this segment with a market share of 45%. ''HP Gas'' also recorded the highest ever Bulk LPG sales of 272 TMT during the year. Enhancing its offerings to customers, your Corporation launched specially formulated LPG for fishing Trawlers, branded as ''HP Gas Dolphin''. Continuing the focus on the safety aspects of Gas stoves in household, your Corporation launched the ''Smart Knob'' which ensures automatic closure of knob in case of flame failure in LPG Gas stoves. LPG Gas stove with higher thermal efficiency was also launched during the year. In addition to all leading platforms, HP Gas is now also available on WhatsApp, enabling customers to avail LPG related services through smart Chatbot. These customer centric initiatives helped HP Gas in recording the highest-ever digital transaction of 39.2% in March 2022.

In the Lubricants segment, your Corporation recorded an overall sales volume of over 545 TMT during the year overcoming various constraints including availability of product supplies pursuant to planned turnaround of Lube Refinery at Mumbai. Your Corporation achieved the highest ever growth of 35% in the export segment of additized Lubricants, achieving an overall export volume of 8.1 TMT lubricants across 12 countries. The commercial production and sales of Diesel Exhaust Fluid (DEF) was scaled up, recording highest ever sales of more than 20 TMT during the year. Digitalization opened up new opportunities for cost optimization and improved delivery of services. Your Corporation strengthened and widened the geographical reach of its marketing network by adding 14 new Channel Partners through online mode. The continued focus on Original Engine / Equipment Manufacturers (OEMs) was maintained which enabled improved participation & renewal of partnerships. During the year, Lube R&D at Mumbai was amalgamated with HPCL Green R&D Centre, Bengaluru with additional facilities bringing in better synergy and resource optimization.

In the Industrial & Consumer (I&C) business line, your Corporation recorded overall sales of 4.8 MMT. The strategy of maximizing volumes in 3 focus products helped to cross 1 MMT sales in Furnace Oil, Diesel and Bitumen individually for the seventh consecutive year. Highest-ever sales were also achieved in Hexane and Jute Batching Oil during the year. Your Corporation commenced High Sulphur Fuel Oil (HSFO) bunkering for scrubber fitted vessels at major ports. Your Corporation launched a new 26KG polybag of Bitumen under the brand "HP TUFFBIT" in order to create differentiation and better positioning to meet the customer requirements. Infrastructure continues to be the key strength of your Corporation in delivering products efficiently and at competitive price to the customers. During the year, rake loading facilities for Mineral Turpentine Oil and Tank truck loading facilities for Naphtha has been commissioned at Mahul Terminal in Mumbai.

In the Aviation business, your Corporation achieved sales volume of 520 TMT of Aviation Turbine Fuel against 398 TMT recorded in the previous year. Aviation network is strengthened with the commissioning of a new Aviation Service Fuel facility (ASF) at Rupsi under the Regional Connectivity Scheme taking the total no. of ASFs to 47. Your Corporation has improved its presence in Defense Sector by adding 5 Indian Air Force (IAF) locations thereby taking the number of IAF locations to 7. From 1^st April 2022, HP Aviation is operational at 52 locations across the country.

In the Gas business, your Corporation has marketed 223 TMT of Natural Gas thus becoming a significant player in this segment. Your Corporation is building City Gas Distribution (CGD) networks in 10 Geographical Areas (GAs) in 4 States (Haryana, Uttar Pradesh, Uttarakhand and West Bengal). First City Gate Station and Mother Station were commissioned in Jind Sonipat GA during the year. Your Corporation commissioned 79 new Compressed Natural Gas (CNG) Stations during the year taking the total number of CNG stations in HPCL authorized GAs to 142. CGD pipeline network of 1643 inch-km pipeline has been added and 20,225 new PNG connections have been released during the year. Domestic PNG supply has commenced in 3 Cites under 3 GAs namely Haldwani, Shahjahapur and Gohana. Industrial PNG supply also commenced in Barhi Industrial Area in Jind-Sonipat GA. Further, your Corporation has been awarded the authorization of Dausa, Karauli, Sawai Madhopur & Tonk Geographical Area by PNGRB in the 11^th round of CGD bidding. Your Corporation is building 5 MMTPA LNG Regasification Terminal at Chhara, Gir Somnath District, Gujarat through HPCL LNG Limited, a 100% subsidiary company. The work is progressing well at site and it is slated to be commissioned during FY 2022-23 as per schedule. Your Corporation has entered into longterm gas sourcing contract from ultra-deep-water fields in KG Basin. Your Corporation is also scouting to source LNG at competitive price from International Market to meet its captive and marketing requirement.

Supplies, Operations and Distribution (SOD) SBU of your Corporation is instrumental for efficient supply chain management and for last-mile delivery. Your Corporation achieved a thruput of 50 MMT during the year due to efficient and optimal supply chain management across the country. A new POL Depot at Hissar (Haryana) has been commissioned along with 10 km dedicated tap-off pipeline from the existing Ramanmandi - Bahadurgarh Pipeline (RBPL) at Barwala which has further optimized logistic costs & strengthened the supply infrastructure. During the year, your Corporation converted 11 more locations as ''SMART'' terminals taking the total to 60 which has resulted in enhanced operational and cost efficiencies. Further, 11 locations have been converted to an Electro Mechanical Locking system taking the total to 57 POL locations with EM locking.

In the Pipeline vertical, your Corporation is currently operating a petroleum product pipeline network of 3,775 km with a mainline capacity of 32.55 MMTPA and branch line capacity of 15.57 MMTPA. During FY 2021-22, total pipeline thruput of 19.9 MMT was recorded against the previous year thruput of 19.1 MMT including LPG thruput of 1.57 MMT. Your Corporation is further expanding the pipeline network and capacities for enhanced logistic efficiencies and associated environmental benefits. The major ongoing pipeline infrastructure projects include

(i) Extension of VVSPL from Vijayawada to Dharmapuri and construction of marketing terminal at Dharmapuri

(ii) Hassan Cherlapally LPG Pipeline (iii) Barmer Palanpur Pipeline and (iv) Bathinda Sangrur Pipeline. These pipeline projects are expected to increase pipeline capacity to over 40 MMTPA and network length to about 5,400 kilometres, thus significantly strengthening your Corporation''s position in key markets. Your Corporation has also teamed up with IOCL and BPCL in the development of India''s longest LPG pipeline from Kandla to Gorakhpur (2,757 km) through a joint venture route.

Towards environmental protection and energy security of the nation, your Corporation is promoting biofuels in the transportation sector. During FY 2021-22, your Corporation has blended 95.07 Crore Litres of Ethanol and achieved an overall 9.03% EBP (i.e. Ethanol Blended Petrol) which is the highest amongst OMCs. Also, your Corporation is the first amongst OMCs to achieve Ethanol blending in all States/ UTs in India and dispatched India''s 1^st Ethanol Rake on 10^thAugust 2021 from Loni to Kadapa. In order to strengthen biofuel infrastructure, your Corporation is constructing a Second Generation Ethanol bio-refinery at Bathinda, Punjab with 100 KLPD Ethanol production capacity, and a Compressed Biogas (CBG) production plant of 14.25 TPD capacity at Badaun, Uttar Pradesh. Both projects are expected to be commissioned during FY 2022-23.

Your Corporation is leveraging Renewable energy sources to reduce the carbon footprints and electricity cost across the value chain and is continuously expanding the wind and

solar power generation capacities. During FY 2021-22, your Corporation has installed captive solar power capacity of 10.06 MWp across various locations, taking the total solar power capacity to 54 MWp as of 31^st March, 2022.

Your Corporation has also set up wind power capacity of 100.90 MW, which generated about 18.84 Crore KWh of electricity during FY 2021-22.

TREASURY MANAGEMENT

The challenges posed by COVID-19 pandemic continued during the financial year 2021-22 with second wave of pandemic resulting into cash flows turning volatile, affecting the working capital requirements of your Corporation. With ample liquidity in the system supported by RBI and relatively moderate interest rates, your Corporation could tide over the situation and the required funding needs could be fulfilled by borrowing at competitive rates.

The long-term requirements to fund the Capex was met through a mix of instruments including Non-convertible debentures for different tenors, aggregating to H 3,450 Crore and External Commercial Borrowings amounting to US$ 550 million. Diversifying its borrowing basket, your Corporation also raised first-ever T-Bill linked floating rate Rupee Term Loan from a bank to the tune of H 2,500 Crore.

Your Corporation effectively used a variety of borrowing instruments to optimize its cost of working capital. The short-term borrowing requirements were met through Triparty Repo Dealing System, Commercial Papers, Buyer''s Credit and Revolving Line of Credit in USD and Working capital facility from Consortium banks.

As of March 2022, your Corporation commands international long term issuer rating of "Baa3" with "Stable" outlook from Moody''s Investors Services, and "BBB-" with "Negative" outlook from Fitch Ratings. Subsequently, in June 2022, Fitch Ratings has revised their outlook to "Stable". Both ratings are at par with sovereign rating.

Your Corporation continues to command highest domestic rating for long term ("AAA" with "Stable" outlook) and short term ("A1 ")facilities from CRISIL, India Rating and Research Limited and ICRA.

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate Internal Financial Controls for ensuring the orderly and efficient conduct of its business including adherence to the Corporation''s 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 information, commensurate with the operation of your Corporation. As part of this exercise, the design of internal controls and its operating effectiveness for the key business processes is tested by external consultant who observed that there are no material weaknesses in Internal Controls over Financial Reporting.

RISK MANAGEMENT POLICY

Your Corporation recognizes that all aspects of its businesses involve significant risk and that with the evolving regulatory landscape there is an increased exposure to a greater scrutiny by the public, regulators, investors, and its stakeholders. Risk Management is focused at ensuring that these risks are known and addressed through a pragmatic and effective Risk Management process.

Keeping attune with today''s VUCA (Volatile, Uncertain, Complex and Ambiguous) world and regulatory requirements in relation to Risk Management, your Corporation has reviewed and revised its Enterprise Risk Management (ERM) framework under the Corporation''s Risk Management Charter and Policy, which is embedded at the forefront of business strategies and focuses on the stronger, deeper and trust-based relationship with the stakeholders.

The Risk Management Charter and Policy is built on the established principles of sound risk management which enables not only management of the existing risks but anticipates emerging risks and deploys mitigating strategies on a continuous basis. It provides necessary support to the business to steer through the continuously evolving risk terrain through dynamic risk management approach that embraces disruption and enhances resiliency and trust. The pandemic and uncertainty in the last two years has stricken communities across the globe. The rapid geographical spread (and multiple variants) of this virus has caught the world off-guard, with major implications for personal health, business continuity and the world economic order. Your Corporation has not only reviewed the risks arising out of this pandemic and but also suitably included new risks, as well as, amended existing risks with mitigating strategies in place. The Risk Management Committee (RMC) receives regular insights on risk exposures faced by the organization, thereby enabling it to provide inputs on prompt actions to be taken as well as monitor the actions taken. The Board is also updated regularly on the risk assessment and mitigation procedures. Keeping with leading global best practices, technology remains at the forefront to support the Enterprise Risk Management processes with a focus on optimizing risk exposures and automating risk reporting across the organization.

VIGILANCE

The Vigilance Department is headed by the Chief Vigilance Officer (CVO) who administers supervision and control of all the Vigilance matters in the Corporation. Vigilance Department carries out focused preventive vigilance activities which help in ensuring transparent business decisions by respective Departments.

Apart from conducting preventive vigilance activities, the major work areas of Vigilance comprise of investigation of complaints received from various sources like Citizens, Stakeholders, Ministry of Petroleum & Natural Gas, Central Vigilance Commission, the Management and other sources etc.

The Vigilance Department deals mainly with matters related to corruption and matters having ''vigilance angle.'' The complaints are handled as per the complaint handling policy stipulated in the Vigilance Manual 2021 of the Central Vigilance Commission. There were 398 cases disposed of during the FY 2021-22 and 30 cases are pending as of 31.03.2022. These cases relate to retail outlet selection, retail outlet operations, LPG distributorship selection, LPG distributorship operations, tendering, transportation, depot/plant operations etc.

Vigilance Awareness Week was observed under the central theme for the year "Independent India @ 75: Self Reliance with Integrity". Various outreach activities viz., focused group presentations, Quizzes, Drawing/ Painting Competitions, Skits/ street plays, Workshops, Technical talks, Grievance redressal camps/ Awareness Gram Sabhas, Rallies/ Walkathons, School/ College Programs etc. were undertaken during the week.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Corporation, being a Government Company is subjected to the CVC Guidelines and the Corporation has a separate Vigilance Department administering the Vigilance matters. Your Corporation has a Whistle Blower Policy approved by the Board and the same is placed on the website of the Corporation. The web link of Whistle Blower Policy is stated herein below:

Web link: https://www.hindustanpetroleum.com/documents/ pdf/Whistle Blower Policy.pdf

RIGHT TO INFORMATION (RTI)

Your Corporation being a public authority has a structured mechanism in place to deal with matters related to the RTI Act in line with the provisions under the Right to Information Act, 2005. Your Corporation has aligned with the Online RTI portal of DoPT (Department of Personnel & Training), Government of India and all applications / appeals received through the portal are handled through the portal itself, including the physical applications. The mandatory reports such as Quarterly / Annual reports are submitted periodically within the stipulated timelines on to the website of the Central Information Commission www.cic.gov.in. Further, all the relevant details along with suo-motu disclosures

under Section 4(1)(b) of the Act, have been hosted on the corporate website www.hindustanpetroleum.in for better transparency and understanding of the public at large.

Your Corporation has designated a Nodal Officer at its Headquarters'' Office to coordinate and oversee the implementation. The RTI applications are addressed within the stipulated time period of 30 days, through the Online RTI portal www.rtionline.gov.in. A team of 225 Central Public Information Officers(CPIO) and 44 First Appellate Authorities(FAA) spread across the country, covering Refineries and major SBUs like Retail, LPG, HR functions such as Recruitment, etc. ensured smooth handling of RTI applications received, despite the pandemic and associated issues of lockdown, postal delays, etc.

During the FY 2021-22, your Corporation has successfully handled and processed 3094 RTI applications, 360 First Appeals and 57 Second appeals [CIC (Central Information Commission) Hearings]. All the 57 CIC Hearings were held virtually, without the physical presence of CPIOs and detailed Written Submissions were submitted to Hon''ble CIC for all the Hearings well within time to enable CIC to pass awards.

INDUSTRIAL RELATIONS

Your Corporation has continued to enjoy excellent Employee Relations during the year with no reported instance of industrial unrest at any of its operating locations. Your Corporation lays great emphasis on continually engaging, enabling and empowering its stakeholders through a variety of interventions. As our Nation is celebrating Azadi Ka Amrit Mahotsav to commemorate 75 years of it independence, with a view to ensure that the objectives of various Labour enactments are met and towards becoming a model employer, the Corporation as a Model employer, observed "Labour Law - Statutory Compliance Fortnight" across all its locations during 14^th February, 2022 to 28^th February, 2022 which was a huge success. Your Corporation also ensured that the arrears of the Long Term Settlement (LTS) which was concluded for its workmen across all Divisions were disbursed both for serving and retired employees.

In order to mitigate and lessen the impact of COVID-19, your Corporation continued with coverage under the Special Medical Insurance Scheme, Group Personal Accident Insurance, Special Ex-gratia scheme of frontline COVID-19 warriors viz. the contract labourers, LPG delivery-men, retail outlet forecourt salesmen, transport crew, security guards etc., during the financial year.

OFFICIAL LANGUAGE IMPLEMENTATION

competition, Hindi fortnight, official language conferences and Hindi workshops etc.

During the year FY 2021-22, your Corporation was conferred with ''Rajbhasha Kirti First Prize'' for implementation of official language for the year 2020-21 and also ''Rajbhasja Kirti First Prize'' for its Hindi House Journal "HP Samachar" for the year 2018-19 by Government of India, Department of Official Language, Ministry of Home Affairs. Your Corporation is coordinating Town Official Language Implementation Committee of Mumbai based PSUs since 1983 and thereby guiding Mumbai based 65 PSUs in the field of Official Language Implementation. Other than the TOLIC Meetings, your Corporation has trained the officials of different PSUs through conducting various programs such as Hindi Translation, Promotion of Hindi and Regional Language etc.

Your Corporation had continuously been awarded with the Official Language Shield, The Best amongst Oil PSUs, by Ministry of Petroleum and Natural Gas, Government of India. Your Corporation has maintained its record in entire Oil Industry by receiving 53 Rajbhasha Awards from Government of India and other Agencies.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation implemented various activities under the focus areas of Childcare, Education, Health Care, Skill Development, Sports and Environment & Community Development.

As a responsible Corporate, your Corporation collaborated with various stakeholders to mitigate the challenges posed due to the outbreak of COVID-19 pandemic. Your Corporation took various COVID-19 relief initiatives like Supply and Installation of PSA Oxygen Generation Plants in various states, Operation & Maintenance of COVID-19 Care Centres and Contribution to ''Prime Minister''s Citizen Assistance and Relief in Emergency Situations Fund'' (PM CARES Fund). The other relief measures such as Installation of Medical Ventilators, Distribution of Oxygen Concentrators, Medical Oxygen Cylinders along with provision of safety kits were also carried out.

During the year, under Project ''ADAPT'', your Corporation endeavored to enhance the quality of lives of Children with Disabilities (CWD) through provision of online education, individual training and online therapeutic treatment.

Under Project ''Nanhi Kali'', girls were provided with online as well as physical remedial classes, material kits, sports curriculum training and counselling on personal hygiene and career development.

Basis the success of previous batch of students, your Corporation continued its collaboration with Indian Army for Project ''Kashmir Super-50 Medical''. Under the project, aspiring students from Jammu & Kashmir valley are provided mentoring and coaching for medical stream. This year witnessed addition of 20 day scholar girl students in the project.

Your Corporation started new Project ''Ladakh Ignited Minds'' in Leh which supports the less-privileged, but ambitious students of Ladakh region to compete in various academic streams like engineering, medical and other career-oriented programs.

To provide basic healthcare facilities in remote rural locations, mobile medical vans were supported as part of ''Project Dhanwantari''. Under Project ''Dil without Bill'', support has been extended for conducting heart surgeries of beneficiaries from lower economic section with special focus on children.

Your Corporation supported 6 Skill Development Institutes (SDI) conceptualized by Government of India and operationalized by Oil & Gas CPSEs focused on imparting skills in industry-oriented trades for improving employability of weaker sections of the society. One of the SDI at Visakhapatnam is being managed by your Corporation.

During Swachhta Pakhwada (1^st - 15^th July, 2021) campaign, your Corporation carried out focused activities to support fight against COVID-19 pandemic by distributing Swachhta Kits, administering e-Swachhta Shapath and conducting virtual and on-ground sensitization campaigns on theme of spreading awareness on COVID-19 appropriate behaviour.

Your Corporation augmented the Healthcare facilities at various district hospitals and primary healthcare centers. Certain basic facilities in various schools were also provided for the benefit of students. Contribution was also made to the Armed Forces Flag Day Fund for the care, support, welfare and rehabilitation schemes for ex-Servicemen (ESM) and their dependents.

Awards & Accolades in CSR

Swachhta Awards

Your Corporation bagged prestigious Award for Swachhta Pakhwada campaign (1^st - 15^th July, 2021) instituted by Ministry of Petroleum and Natural Gas and Ministry of Drinking Water and Sanitation.

FICCI CSR Awards 2021

Your Corporation was conferred with 19^th FICCI CSR Awards for CSR Project Kashmir Super-30 (Medical). FICCI carried out initial screening, thereafter, academicians conducted online field assessment. Finally, an independent jury comprising of prominent Industry leaders made the selection of award winners.

FICCI: India@75: Chemical and Petrochemical Industry Awards

Your Corporation was conferred winner of FICCI award for Excellence in CSR in Petrochemicals (Public Sector).

The details of CSR activities of the Corporation containing details of CSR Committee Members, brief outline of the CSR policy, overview of the CSR initiatives, prescribed expenditure, amount spent etc. that form part of this Report are furnished in Annexure III.

CORPORATE GOVERNANCE

PROCUREMENT OF GOODS & SERVICES FROM MSEs

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 and its amendments thereof. In line with the said Policy, your Corporation had set an annual goal of sourcing a minimum procurement of 25% of its total requirements from MSEs and within it, 4% of total requirement has been earmarked for procurement from MSEs, owned by SC/ST entrepreneurs and another 3%, from women entrepreneurs. For the benefit of MSEs, the MSE procurement details are regularly uploaded on Sambandh Portal of Ministry of MSME, besides displaying the Annual Procurement Plan on the Corporation''s website.

Against the above set target for FY 2021-22, your Corporation has achieved 37.29% (H 4,257.58 Crore) of procurement of goods & services from MSEs excluding items which are beyond the scope of MSEs. The excluded items are Crude Oil, Petroleum Products, logistics cost through shipping, Railways & Pipelines, LNG/Natural Gas, API Line pipes, OEM spares & services, proprietary items and services, Technology Licenses and Licensor mandated items, Plant & Machinery and single item value equal to or more than H 50 Crore. To promote the objectives of procurement from MSEs as laid down in Public Procurement Policy, 52 Vendor Development Programs/ Buyer-Supplier meet for MSEs were conducted during the financial year. During these meets, the Corporation''s procurement processes were articulated through detailed presentation to MSE vendors with an intent to increase awareness of vendor registration process, tendering process, availability of TReDS platform, procurement on GeM platform etc. Implementation of various Government directives/policies of providing relief to MSMEs and promoting indigenisation of products and services were also explained during these programs.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Corporation has ensured compliance with various provisions under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. To inculcate appropriate workplace behaviour and promote gender sensitization, your Corporation mandated all its executive employees to undergo awareness sessions through online courses and workshops conducted on the subject. Internal Complaint Committee (ICC) of the Corporation were reconstituted and detailed guidelines on procedures relating to the functioning of the ICC were circulated.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis Report forms part of the Annual Report for FY 2021-22.

FINANCIAL STATEMENTS OF SUBSIDIARIES

COST AUDIT

The maintenance of Cost Records, as specified under Section 148(1) of the Companies Act, 2013 is mandated and accordingly such accounts and records are made and maintained. The Cost Audit for FY 2020-21 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs within the stipulated time for filing.

DIRECTORS

Your Corporation''s Board presently comprises 10 Directors. The Whole Time Directors are Shri Pushp Kumar Joshi, Chairman & Managing Director, Shri Vinod S Shenoy, Director - Refineries and Shri Rajneesh Narang, Director - Finance.

The Government Nominee Directors are Shri Sunil Kumar, ex-officio, Joint Secretary (Refineries), Ministry of Petroleum & Natural Gas and Shri Pankaj Kumar, Director (Offshore), ONGC.

The Independent Directors are Smt. Vimla Pradhan, Shri Bechan Lal, Shri Vivekananda Biswal, Shri Ramdarshan Singh Pal and Dr. Nagaraja Bhalki.

As per the provisions of Section 152 of the Companies Act, Shri Vinod S Shenoy is the Director who is liable to retire by rotation at the next Annual General Meeting and being eligible offers himself for re-appointment.

DETAILS OF CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) DURING FY 2021-22 AND TILL DATE

A) Directors

â¢ Shri Subhash Kumar, Government Nominee Director (Representative of ONGC) has resigned from the Board of the Company effective May 20, 2021.

â¢ Dr. Alka Mittal, was appointed as Government Nominee Director (Representative of ONGC) on the Board of your Company effective June 17, 2021.

â¢ Shri R Kesavan, Director - Finance (Whole Time Director) has ceased to be Director of your Company effective July 01, 2021 on attaining the age of superannuation.

â¢ Smt. Vimla Pradhan, Shri Bechan Lal, Shri Vivekananda Biswal, Shri Ramdarshan Singh Pal were appointed as Independent Directors on the Board of your Company effective November 16, 2021.

â¢ Dr. Nagaraja Bhalki was appointed as an Independent Director on the Board of your Company effective December 30, 2021.

â¢ Dr. Alka Mittal, Government Nominee Director (Representative of ONGC) has resigned from the Board of the Company effective January 5, 2022.

â¢ Shri Rajneesh Narang was appointed as Director -Finance (Whole Time Director) on the Board of your Company effective March 22, 2022.

â¢ Shri Rakesh Misri, Director - Marketing (Whole Time Director) has ceased to be Director of your Company effective April 01, 2022 on attaining the age of superannuation.

â¢ Shri Mukesh Kumar Surana, Chairman & Managing Director (Whole Time Director) has ceased to be Director of your Company effective May 01, 2022 on attaining the age of superannuation.

â¢ Shri Pankaj Kumar, Director (Offshore) ONGC, was appointed as Government Director of the Company effective June 22, 2022.

â¢ Shri G Rajendran Pillai has ceased to be an Independent Director of the Company effective July 15, 2022 on completion of tenure of office of 3 years on July 14, 2022.

B) KMP

â¢ Shri R Kesavan, Director - Finance (Whole Time Director) and CFO of your Company has ceased to be CFO of the Company effective July 01,2021.

â¢ Shri Rajneesh Narang, Executive Director -Corporate Finance of the Company was appointed as Chief Financial Officer (CFO) of the Company effective July 01,2021.

C) Resignation of a Director who resigns from his office by giving a notice in writing to the Company

â¢ Shri Subhash Kumar, Part-Time Director Representative of ONGC has ceased to be Director with effect from May 20, 2021.

â¢ Dr. Alka Mittal, Part-Time Director Representative of ONGC has ceased to be Director with effect from January 05, 2022.

NUMBER OF MEETINGS OF THE BOARD

During FY 2021-22, 12 Board Meetings were held. The details of these Meetings are given in the Corporate Governance Report for the financial year.

MANAGERIAL REMUNERATION

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Your Corporation being a Government Company, the compliance of Section 134(3)(p) is exempted by virtue of MCA Notification dated 5^th June 2015 as the annual evaluation of the performance of the Board, its Committees and of Individual Directors are carried out by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MOP&NG).

DECLARATION BY INDEPENDENT DIRECTORS

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Corporation, being a Government Company is exempted to furnish information under Section 134(3)(e) of the Companies Act, 2013 vide MCA Notification dated 05/06/2015.

OPINION OF BOARD REGARDING INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTOR APPOINTED DURING THE YEAR

Your Corporation, being a Government Company, all the Directors including Independent Directors are appointed by Government of India.

Independent Directors are selected by search committee constituted by Government of India from mix of eminent personalities having requisite expertise and experience in diverse fields.

During FY 2021-22, 5 Independent Directors were appointed on the Board. These Directors have registered themselves with Independent Directors Databank maintained by Indian Institute of Corporate Affairs (IICA) of Ministry of Corporate Affairs. Out of 5 Independent Directors, Shri Vivekananda Biswal is exempted from undergoing Online Proficiency Test based on fulfillment of exemption criteria. The other 4 Directors can undergo test within a period of 2 years from the date of their inclusion of names in the Independent Directors'' databank.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

AUDIT COMMITTEE

The present composition of Audit Committee, which requires reporting under Section 177(8) of the Companies Act, 2013 is given as under:

Sl. No.	Name	Category
1	Shri Bechan Lal	Independent Director - Chairman
2	Shri Vivekananda Biswal	Independent Director - Member
3	Shri Ramdarshan Singh Pal	Independent Director - Member

The changes in the composition of Audit Committee during the Financial Year 2021-22 and till date are:

â¢ Shri Subhash Kumar, Part-Time Director Representative of ONGC on the Board of the Company and Member of the Audit Committee effective October 01^st, 2020 had held this post till he ceased to be Director of the Company effective May 20, 2021.

â¢ Shri R Kesavan, Director-Finance on the Board of the Company and Member of the Audit Committee effective September 23, 2019 had held this post till he ceased to be Director of the Company effective July 01,2021.

â¢ Shri Sunil Kumar, Ex-Officio Director on the Board of the Company and Member of the Audit Committee effective October 01, 2020 had held this post till he ceased to be Member of the Audit Committee of the Company effective November 30, 2021.

â¢ Dr. Alka Mittal, Part-Time Director Representative of ONGC on the Board of the Company and Member of the Audit Committee effective July 28, 2021 had held this post till she ceased to be Member of the Audit Committee of the Company effective November 30, 2021.

â¢ Shri Bechan Lal & Shri Vivekananda Biswal were inducted into the Committee as Members effective November 30, 2021. Shri Bechan Lal was subsequently appointed as Chairman of the Audit Committee effective July 15, 2022.

â¢ Shri G Rajendran Pillai, Independent Director of the Company and Chairman of the Audit Committee effective October 01, 2020 had held this post till he ceased to be Director of the Company effective July 15, 2022.

â¢ Shri Ramdarshan Singh Pal was inducted into the Committee as Member effective July 15, 2022.

During the year, there were no cases observed where Board had not accepted the recommendations of Audit Committee. The recommendations of Audit Committee are broadly accepted by the Board.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has appointed M/s. Ragini Chokshi & Co., a firm of Practicing Company Secretaries to undertake Secretarial Audit of the Company for the Financial Year 2021-2022. The Report of Secretarial Auditor in Form No. MR-3 is annexed herewith and marked as Annexure IV.

The Report does not contain qualification, reservation or adverse remark except the following:

â¢ The Company could not comply with requirement of having optimum combination of executive and nonexecutive Directors and not less than fifty percent of the Board of Directors as non-executive Directors and having at least one independent woman director on the Board from April 01,2021 to November 15, 2021;

â¢ The Company could not comply with the requirement of having at least half of the Board of Directors as Independent Director from April 01,2021 to December 29, 2021;

â¢ The Company could not comply with the requirement of having at least two-thirds of the members of Audit Committee as Independent Directors as the Committee was having only one Independent Director as a member during the period from April 01,2021 to November 29, 2021;

â¢ The Company could not comply with the requirement of having at least 50% (this requirement was later on amended to two-thirds effective January 01, 2022) of the Directors as Independent Directors in Nomination and Remuneration Committee from April 01, 2021 to November 29, 2021 and the requirement of having at least three members from May 21,2021 to July 27, 2021.

In this regard, your Company confirms that being a Government Company, which is under the Administrative Control of Ministry of Petroleum and Natural Gas (MOP&NG), the power to appoint Directors (including Independent Directors) and finalizing the terms and conditions of appointment vest with Government of India. The matter regarding appointment of required number of Independent Directors/Independent Woman Director have been taken up with MOP&NG from time to time and the Government is seized of the matter.

It may be noted that during the Quarter ended December 31, 2021, Government of India appointed 5 Independent Directors including 1 Woman Independent Director on the Board of the Company. This has resulted in compliance with all the above requirements of SEBI LODR, Regulations, 2015.

COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS

C&AG AUDIT

C&AG''s comment upon or supplement to the Statutory Auditors'' Report on the Accounts for the year ended 31^st March, 2022 is attached along with Financial Statements. Further, as at 31 March, 2022, there are 6 pending paras related to the C&AG audit. These relate to encashment of Earned Leave/Half Pay leave/Sick Leave as well as Employer''s share of EPF contribution on leave encashment; non-recovery of perquisite tax; payment of shift allowance to executives; payment of stagnation reliefs; non-recovery of dues in a case of bank guarantee, not encashed; additional expenditures due to non - utilisation of pipeline in economical manner. The audit observations have been suitably replied.

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the financial year 2021-22 in Form No. AOC-2 is annexed herewith and marked as Annexure V.

WEB LINK OF ANNUAL RETURN

The Web link of Annual Return (MGT-7) is https://www.hindustanpetroleum.com/AGMDetails

PARTICULARS OF EMPLOYEES

The details regarding the number of women employees visa-vis the total number of employees is given herein under:

	Total No.	No. of	% of
Group	of	Women	Women
	Employees	Employees	Employees
Management	6018	736	12.23%
Non-Management	3047	186	6.10%
TOTAL	9065	922	10.17%

REPORTING OF FRAUDS BY AUDITORS

During the year under review, Auditors has not reported to the Audit Committee (under Section 143 (12) of the Companies Act, 2013) any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board''s report.

DETAILS OF EACH OF THE FRAUD REPORTED TO THE AUDIT COMMITTEE OR THE BOARD DURING THE YEAR

NIL

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

NIL

There has not been any instance of one-time settlement done with banks/financial institutions during the financial year.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATES

There are no instances of companies which have become or ceased to be your Corporation''s Subsidiaries, Joint Ventures or Associate companies during FY 2021-22.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During FY 2021-22, your Corporation has not received any Order or Direction of any Hon''ble Court or Tribunal or Regulator, which either affects your Corporation''s status as a going concern or which substantially or significantly affects your Corporation''s business operations.

DETAILS OF DEPOSITS

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed that:

i. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

iv. The Directors have prepared the Annual Accounts on a going concern basis.

v. The Directors, have laid down internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively.

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors also wish to thank all dealers and distributors spread all over the country and the HP- Pariwar for reposing their faith, trust and confidence in your Corporation towards improving the service to the valued customers as well as for the overall performance of the Corporation.

Your Directors are thankful to the Shareholders for their faith and continued support in the endeavors of the Corporation.

For and on behalf of the Board of Directors

sd/-

PUSHP KUMAR JOSHI Date: August 01,2022 Chairman & Managing Director

Mar 31, 2021

Dear MEMBERS,

On behalf of the Board of Directors, it gives me immense pleasure in presenting this Report on the performance of your Corporation for the financial year ended March 31, 2021.

âDifficult roads always lead to beautiful destinationsâ is the mantra that your Corporation believed in the midst of severe global health emergency experienced in modern history. One of the milestones as we travel towards this destination is crossing over a '' 10,000 Crore mark in Profit after Tax, the 1^st ever in the annals of your Corporation. The Board dedicates this success to the service of all the COVID warriors who associated themselves in one way or the other during the year with your Corporation.

HIGHLIGHTS

('' / Crore)
	Consolidated		Standalone
	2020-21	2019-20	2020-21	2019-20
FINANCIAL PERFORMANCE
Sales/Income from Operation	2,69,493.69	2,86,574.27	2,69,242.86	2,86,250.27
Earnings before Interest, Tax, Depreciation & Amortization and Exceptional items	18,785.75	6,885.94	18,714.17	6,961.63
Depreciation & Amortization Expenses	(3,625.47)	(3,369.87)	(3,552.65)	(3,304.39)
Finance Cost	(963.28)	(1,138.85)	(914.73)	(1,081.72)
Profit before Tax and exceptional items	14,197.00	2,377.22	14,246.79	2,575.52
Exceptional items - Income/(Expense)	-	(1002.93)	-	(1,002.93)
Profit before Tax (PBT)	14,197.00	1,374.29	14,246.79	1,572.59
Tax Expenses	(3,534.11)	1,264.44	(3,582.91)	1,064.67
Profit after Tax (PAT)	10,662.89	2,638.73	10,663.88	2,637.26
Balance brought forward from previous financial year Amount available for Appropriation Appropriations/Others:	27,485.23	26,923.39	25,394.07	24,941.79
Debenture Redemption Reserve (net)	(33.84)	(513.46)	-	(625.00)
Dividend	(1,485.72)	(1,432.39)	(1,485.72)	(1,432.39)
Tax on distributed profits	-	(294.43)	-	(294.43)
Other Comprehensive Income that will not be reclassified to profit or loss(net of tax)	(88.95)	(161.50)	(92.23)	(158.05)
Utilisation for shares buy-back	(208.61)	-	(208.61)	-
Other Appropriations	(262.17)	324.89	-	324.89
Balance carried forward	36,068.83	27,485.23	34,271.39	25,394.07
SHAREHOLDERSâ VALUE (?) Earnings per Share	70.57	17.32	70.57	17.31
Cash Earnings per Share	94.21	29.36	94.06	30.23
Book Value per Share	262.26	203.31	249.21	190.06

PHYSICAL PERFORMANCE (MMT)	2020-21	2019-20
Market Sales (including Exports)#	36.63	39.60
Crude Thruput:
Mumbai Refinery	7.37	8.07
Visakh Refinery	9.05	9.11
Total Crude Thruput	16.42	17.18

# Market Sales (including exports) as per Ind AS is 36.59 MMT for financial year 2020-21 and 39.64 MMT for financial year 2019-20.

SALES/INCOME FROM OPERATIONS

Your Corporation has achieved Sales/Income from Operations of '' 2,69,242.86 Crore in the financial year 2020-21 as compared to '' 2,86,250.27 Crore in the financial year 2019-20 on a standalone basis.

PROFIT

Your Corporation has reported Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) of '' 18,714.17 Crore in the financial year 2020-21 as against '' 6,961.63 Crore in the financial year

2019- 20 (without considering an exceptional expense of '' 1,002.93 Crore) and Profit after Tax of '' 10,663.88 Crore in the financial year

2020- 21 as compared to '' 2,637.26 Crore in the financial year 2019-20 on a standalone basis.

DIVIDEND

The Board of Directors, after taking into account the Financial Results of the Corporation during the financial year, have recommended a final dividend of '' 22.75 per share for the financial year 2020-21 as compared to '' 9.75 per share for the financial year 2019-20.The amount of final dividend as recommended by the Board totaling to '' 3,227.20 Crore will be paid out of profits earned for the financial year.

SHARES BUY BACK

Your Corporation has rolled out a âShares Buy-back Program'' for an aggregate amount not exceeding '' 2,500 Crore (excluding taxes and transaction cost), to be executed from the Open Market through Stock Exchange Mechanism at a price not exceeding '' 250/- per Equity share. The program has concluded on May 14, 2021, mopping up 10,52,74,280 Shares at an average buy-back price of '' 227.76 per share (excluding taxes and transaction costs). Upon closure of the buy-back program on the said date, your Corporation''s share price closed at '' 254.40 per share in National Stock Exchange of India Ltd. (NSE). Your Corporation is 1^st amongst PSU Companies to execute this program through Stock Market Operations, providing liquidity and support thereby rewarding the loyal shareholders with an option to sell their holding during this period.

INTERNAL RESOURCES GENERATION

Your Corporation has generated Internal Resources (net of dividend payout) of '' 12,727.53 Crore during the financial year 2020-21 as

compared to '' 2,879.29 Crore during the financial year 2019-20 on a standalone basis.

ACQUISITION OF 100% OWNERSHIP IN A GROUP COMPANY

On March 30, 2021, your Company acquired balance 50% stake in HPCL Shapoorji Energy Pvt. Ltd. (HSEPL) held by SP Ports Pvt. Ltd. With this, HSEPL has become a 100% subsidiary of HPCL. The acquisition is in line with overall future strategy of HPCL to diversify its product portfolio and is an important step in the direction of having a strong presence in the total Natural Gas value chain. The 5 MMTPA LNG Terminal at Chhara, Gujarat involving a project cost of about '' 4,300 Crore is likely to be completed by end of calendar year 2022. The project is further expandable to a capacity of 10 MMTPA in future.

CONTRIBUTION TO EXCHEQUER

Your Corporation has contributed a sum of '' 95,332.94 Crore to the exchequer during the financial year 2020-21 by way of duties and taxes, as compared to '' 76,133.41 Crore during the financial year 2019-20 on a standalone basis.

REFINERY PERFORMANCE

In FY 2020-21, refineries have delivered yet another sound physical performance, recording refining thruput of 16.42 Million Metric Tonnes (MMT) as compared to 17.18 MMT during the previous year amidst unprecedented challenges arising due to COVID-19 pandemic, thus achieving a combined capacity utilisation of 104%.

Refineries have surpassed few previous landmarks in the course of their robust performance during the current financial year. Mumbai refinery achieved highest ever production of Lube Oil Base Stocks SPO 90 N, SPO II and 150 N II. Towards diversification of product portfolio, Mumbai refinery commenced production of Solvent 3275, making it 37^th product from the refinery. Visakh refinery achieved highest ever production of LDO, VLSFO, MTO and JBO, which are high margin products.

Continuing their focus towards a safe and secure work environment, both refineries have put in place a robust system to bring in safety awareness amongst personnel in their respective assignments on a regular basis. Mumbai refinery achieved best ever safety performance by clocking 30.08 million man-hours of safe operations as of 31^st March 2021.

Both refineries are in the process of implementing projects for capacity augmentation. Visakh Refinery Modernization Project (VRMP), with an aim to enhance the refining capacity from 8.3 to 15 MMTPA and Mumbai Refinery Expansion Project (MREP), with an aim to enhance the refining capacity from 7.5 to 9.5 MMTPA are in an advanced stage of execution. The execution of Residue Upgradation Facilities, as part of VRMP is also in progress.

To further enhance refining capacity, your Corporation is setting up a new 9 MMTPA Greenfield Refinery cum Petrochemical Complex at Pachpadra in Barmer District of Rajasthan through its joint venture company, HPCL Rajasthan Refinery Limited (HRRL). Despite several constraints posed by the pandemic, HRRL has achieved significant progress during the financial year 2020-21. Engineering & Procurement activities of some of the major process units are in an advanced stage. Construction of various other facilities like main warehouse, boundary wall, bund wall, roads, water reservoir for construction etc. have been completed.

Operating Performance of Refineries:

The significant operating achievements during the financial year 2020-21 are as below:

Parameter	Unit	Mumbai Refinery	Visakh Refinery
Crude Thruput (â000 Metric Tonne)	TMT	7,374	9,050
Capacity utilization	%	98.3	109
Distillate yield	0/ /o	77.4	74.5
Fuel & Loss	%	8.18	7.93
Specific Energy Consumption	MBTU/BBL/ NRGF	97.85	80.96
Gross Refinery Margin	$/BBl.	4.10	3.67

MARKETING PERFORMANCE

During FY2020-21, your Corporation has delivered an excellent performance amidst the turbulence caused by the global pandemic by achieving a sales volume of 36.63 MMT including exports (FY2019-20: 39.60 MMT).

In Domestic Sales segment, your Corporation has recorded a sales volume of 35.24 MMT (FY2019-20: 37.74 MMT) and achieved a market share of about 21.3% amongst public sector Oil Marketing Companies (OMCs), a gain of 0.47% over historical. In the backdrop

of demand contraction of petroleum products, intense competition and pandemic induced lockdown, the achievement is significant.

In the motor-fuel segment, your Corporation achieved sales volume of 22 MMT in FY2020-21 with market share gain of 0.14% on Total Motor Fuels basis (amongst PSUs) for the 14^th consecutive year. The year witnessed highest ever commissioning of 2,158 new Retail outlets (taking the number of total retail outlets to 18,634) and commissioning of CNG facilities at 203 Retail outlets (such outlets aggregating to 674 Nos.). Further, door-to-door Mobile Dispensers, numbering 369 Units and EV Charging Facilities at 55 Retail Outlets have been commissioned during the year. The thrust on digital payments continued with the launch of HPCL-Union Bank of India co-branded Rupay Credit Card with National Common Mobility Card (NCMC) feature, which is the first amongst the OMCs. âHP Pay'' mobile app, which was launched last year has gained traction by clocking an average of 6 lakhs transactions per month. Digital modes of payment which are extensively promoted at retail outlets resulted in highest ever digital conversion of 40.3% in Total Motor Fuels (TMF) sales as of 31^st March, 2021. âCOMCO Millennium, Visakh'', a premier retail outlet of your Corporation has achieved sale of 12,032 KL petrol during the year, becoming the highest petrol selling outlet in the country, once again emphasizing the superior brand value of âHPCLâ in the market.

In LPG business vertical, your Corporation set a new record in FY2020-21 with sales of 7.4 MMT, a growth of 5.3% over the previous year. It is shared with pride that the Hon''ble Prime Minister of India dedicated the 120 TMTPA Champaran LPG Bottling Plant to the nation for meeting the rising demand of LPG. During the year, your Corporation enrolled 22.80 lakhs new customers and commissioned 112 new regular LPG distributorships (taking the total number of distributors to 6,192). During the financial year, as a COVID relief measure, Government of India has rolled out Pradhan Mantri Garib Kalyan Yojana (PMGKY) under which, 3.81 Crore refills were delivered to the beneficiaries. In Free Trade LPG (FTL) sales segment, your Corporation boosted its market dominance by selling over 3 million APPU cylinders (in package sizes of 5kg/2kg) with a market share of 45%. Your Corporation launched a new product âHP GAS FLAME PLUSâ for its commercial and industrial customers. To increase adoption of digital modes of payments for refill booking and better customer convenience, âHP Gas refill booking and payment'' was made available on âAmazon'' and via its voice-assistant âAlexa''. New services and features were integrated in âHP PAY'' app and âHP GAS Vitran'' app for customer value maximization. With these initiatives, âHP Gas'' recorded highest ever digital transaction of 25.3% in March 2021.

Your Corporation is continuing to hold the numero uno position as a leading Lube marketeer in the country for the 8^th consecutive year with a sales volume of more than 600 TMT (â000 Metric Tonne). The value added lubes category recorded highest ever sales of 545 TMT, registering a growth of 6% over the previous year. Export of

14.8 TMT of lubricants to 16 countries including new footprints in 6 of these could be achieved during the year. Your Corporation has scaled up commercial production and sales of Diesel Exhaust Fluid (DEF) for BS VI engines with sales crossing 12.5 TMT during the year.

In Industrial & Consumer (I&C) business line, your Corporation recorded overall sales volume of about 4.8 MMT. The strategy of maximising volumes in three focus products helped to cross 1 MMT sales volume in furnace oil (FO), diesel and bitumen, individually, for the 6^th consecutive year. Highest-ever sales was recorded in light diesel oil, mineral turpentine oil and jute batching oil during the year. Your Corporation has launched HP BITUMEN VG-40 SUPER, a branded bitumen targeting sales to large infra companies.

In the strategic gas business, your Corporation is setting up CGD networks in 10 geographical areas (GAs) in the state of Haryana, Uttar Pradesh, Uttarakhand and West Bengal for which the authorization was granted during 9^th and 10^th round of CGD bidding by Petroleum and Natural Gas Regulatory Board. During the year, 51 new CNG stations were commissioned in these GAs. Import of LNG from International Market commenced during the year and your Corporation also started marketing natural gas to industrial customers. To facilitate sourcing and marketing of natural gas, a 5 MMTPA LNG regasification terminal at Chhara port (Gir Somnath District) in Gujarat is under construction through HPCL Shapoorji Energy Pvt. Ltd. (HSEPL), a wholly owned subsidiary company.

In Aviation business line, your Corporation achieved a Sales volume of 398 TMT of aviation turbine fuel. Aviation Service Facility (ASF) network was augmented with commissioning of new ASFs at Shirdi and Kurnool taking the total number of ASFs to 46.

Team âSupplies, Operations and Distribution'' (SOD) played a pivotal role in maintaining a robust supply chain especially during the difficult market conditions following the pandemic outbreak. Your Corporation achieved thruput of 47.3 MMT and maintained uninterrupted supplies of petroleum products across the entire supply chain from refineries to the end customers. Contactless (Face Recognition based) Centralized Biometric Access Control System was commissioned at 40 locations. In the path towards digitization, âProject Sangrahâ was conceptualized to achieve paperless office at all major POL locations. During the year, your Corporation added 18 more locations, totaling 50 as âSMART'' terminals with automation and seamless integration of various processes. Ushering new norms of supply chain, your Corporation is embarking upon various new supply practices viz. handling Oxy and Non Oxy MS, loading Gasohol rakes for the first time etc..

Your Corporation is expanding the pipeline network and capacities for enhanced logistic efficiencies, economics and the associated environmental benefits. Major pipeline infrastructure projects being undertaken are (i) Extension of Visakh-Vijayawada-Secunderabad

Pipeline (VVSPL) from Vijayawada to Dharmapuri and construction of marketing terminal at Dharmapuri (ii) Hassan-Cherlapally LPG Pipeline and (iii) Barmer-Palanpur Pipeline with an estimated investment of about '' 6,000 Crore. These pipeline projects will increase the pipeline network length to about 5,300 Kms and mainline capacity to over 41 MMTPA, thus significantly strengthening your Corporation''s position in key markets. The development of India''s longest LPG pipeline from Kandla to Gorakhpur (2,757 Km), through joint venture route is ongoing. During FY2020-21, a total pipeline thruput of 19.1 MMT is achieved, which includes LPG Pipelines achieving a thruput of 1.5 MMT.

Your Corporation is fully committed to environment protection, sustainability measures and steps for reduction of Green House Gas (GHG) emissions by promoting biofuels in transportation. During the year, ethanol blending of 6.18% could be achieved (blending 58.8 Crore litres of ethanol in petrol). In addition, blending of 4.1 Crore litres of biodiesel could also be achieved.

Your Corporation has the distinction of being the 1^st amongst the OMCs to commence gasohol rake loading. In order to augment the biofuel infrastructure, your Corporation is constructing a second generation ethanol bio-refinery at Bathinda, Punjab with 100 KL/day ethanol production capacity, and a compressed biogas (CBG) production plant of 15 MT/day capacity at Badaun, Uttar Pradesh. Both projects will have biomass as feedstock and are expected to be commissioned during FY2022-23. Renewable energy sources are being leveraged to reduce the carbon footprints and electricity cost across the value chain. During FY2020-21, your Corporation installed captive solar power capacity of 11.4 MWp at Retail Outlets, POL locations, Pipeline stations etc. taking the total solar power capacity to 43.95 MWp. In addition, about 17.05 Crore kWh of electricity could be generated from 100.9 MW wind power capacity during the year and sold.

TREASURY MANAGEMENT

The financial year 2020-21 has been very engaging, absorbing and one of the challenging years. The year began with a black swan event viz. COVID-19 pandemic leading to nation-wide lockdown and restricted mobility causing demand contraction, which led to additional working capital requirements. Moving swiftly, your Corporation tied up the funding needs from Banks & floating commercial papers thereby ensuring adequate availability of funds. Aided by adequate liquidity support from Reserve Bank of India, moderation in Benchmark interest rates and optimum utilization of diverse borrowing instruments, the requisite funding needs of your Corporation could be fulfilled at lowest borrowing costs in recent years.

During the year, your Corporation raised a US$ 300 Million loan at fixed rate of interest for a period of 5 years at highly competitive pricing. This is the first ever fixed interest rate ECB Loan sanctioned by a bank to any Indian Corporate. The loan has been availed at a time when the US interest rates are at historical lows and the same should help optimize

the borrowing costs and protection in the event of rising interest rate scenario. Diversifying the borrowing base, your Corporation has also raised Non-Convertible Debentures for 3/5 Year Tenors aggregating to '' 3,200 Crore during the year at very attractive yields.

Your Corporation has effectively used a variety of borrowing instruments to optimize its cost of working capital. The short-term borrowing requirements were met through Triparty Repo Dealing System, Commercial Papers, Buyer''s Credit and Revolving Line of Credit in USD and Working facility from consortium banks.

As of March 2021, your Corporation commands international long term issuer rating of âBBB-â with âNegativeâ outlook from Fitch Ratings, and âBaa3â with âNegativeâ outlook from Moody''s Investors Services. Both ratings are at par with sovereign rating.

Your Corporation continues to command highest domestic rating for long term (âAAAâ with âStableâ outlook) and short term (âA1 â) facilities from CRISIL, India Rating and Research Limited and ICRA.

IMPACT OF COVID-19 ON BUSINESS

The impact assessment of COVID-19 is a continuing process, given the uncertainties associated with its nature and duration. The year began with a nation-wide lockdown and the total domestic sales volume of your Corporation dropped by over 48% in April 2020 as compared to corresponding previous period, only to gradually improve with passage of time with relaxations announced by the Central Government and the State Governments. By and large, the path to the recovery has been steady. While Q1 witnessed a de-growth of 25.8% (negative), it substantially came down to 9.4% (still negative) in Q2. The trend, namely, recovery in the Country''s economic activity continued and finally Corporation''s domestic sale of petroleum products witnessed a positive growth of 2.7% in Q3 and the sustained momentum led to a growth of 6.5% in Q4. Though the path to the recovery could be substantially attained by Q4, the year as a whole witnessed a contraction of 6.6% in the total domestic sales of the Corporation.

Your Corporation managed the crude oil inventory by optimizing the scheduling of crude cargoes in line with refinery operations. Product inventories were managed by leveraging cross country product pipeline network and PAN-Indian marketing infrastructure of the Corporation. By optimizing the day-to-day crude run rate and regulating the product procurement from other sources, the Corporation could achieve an overall combined capacity utilization of 104% at its Refineries. The regulated production at its Refineries caused by the pandemic combined with operational exigencies led to an overall de-growth of 4.4% (negative) in the combined Refinery thruput for this

finanrial \/oqr

In view of the negative growth in the economy, various cost optimization initiatives were undertaken across the Corporation, which resulted in significant savings in costs. The Crude Oil & Product price had hit the rock-bottom in March/April 2020, which has recovered substantially during the year leading to significant inventory gains. Seizing the opportunity of lower price, inventories had been steadily built-up in hinterland locations, a tactical move leading to higher inventory gains. For most part of the financial year, the product cracks were depressed, impacting the GRMs of Refineries.

All critical supply locations of your Corporation have continued operating during the lockdown period with health, hygiene and safety measures in place. All the supply and distribution locations including bulk storage terminals and depots, LPG bottling plants, aviation fuel stations, lube blending plants etc., functioned with optimized manpower under the advisories of the respective State Governments and local administrations to maintain supply of POL products.

The working at the non-critical locations was streamlined with work-from-home norms and minimal physical presence to ensure proper social distancing. Protocols were developed for mobile communications, digital connectivity and dedicated portals.

Project construction sites were required to be closed after announcement of nationwide lockdown under directives from concerned authorities. However, after announcement of relaxations from Central Government and some of the State Governments, project sites were restarted gradually from April 20, 2020 and by September, resumption to pre-COVID level could substantially be achieved.

Despite slew of measures to contain the spread of virus and the roll-out of large scale vaccination, the country is hit hard with the 2^nd wave, far more severe than the 1^st in terms of nerve wracking human tragedy it has been causing. Given the uncertainties associated, the impact assessment of COVID-19 is a continuing process and your Corporation is highly watchful of the developments and taking all the proactive steps in minimizing the impact.

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate Internal Financial Controls for ensuring the orderly and efficient conduct of its business including adherence to the Corporation''s 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 information, commensurate with the operation of your Corporation. As part of this exercise, the design of internal controls and its operating effectiveness for the key business processes is tested by external consultant who observed that there are no material weaknesses noted in Internal Controls over Financial Reporting. The entire activity of review and assessment of Internal Controls was carried out under the guidance of a Steering Committee set-up for this purpose.

RISK MANAGEMENT POLICY

Risk is inherent in all businesses and the key to success is to anticipate risks and deploy an appropriate framework to manage the risks. In today''s VUCA (Volatile, Uncertain, Complex and Ambiguous) world, the external and internal environment is changing at an ever increasing pace and which, in turn, requires businesses to not only manage the existing risks but anticipate emerging risks and deploy mitigating strategies on a continuous basis. Embracing the upside risk opportunities combined with deploying the mitigation strategies are key to success.

Your Corporation has established an Enterprise Risk Management (ERM) framework under the Corporation''s Risk Management Charter and Policy 2007, which is embedded at the forefront of business strategies and focuses on the stronger, deeper and trust-based relationship with the stakeholders. It provides necessary support to the business to steer through the continuously evolving risk terrain through dynamic risk management approach that embraces disruption and enhances resiliency and trust.

The outbreak of the COVID-19 pandemic has stricken communities across the globe. The rapid geographical spread of this virus has caught the world off-guard, with major implications for personal health, business continuity and the world economic order. Your Corporation has immediately reviewed the risks arising out of this pandemic and suitably included the new risks as well as amended the existing risks with mitigating strategies in place.

The Risk Management Committee (RMC) receives regular insights on risk exposures faced by the organization, thereby enabling it to provide inputs on prompt actions to be taken as well as monitor the actions taken. The Board is also updated regularly on the risk assessment and mitigation procedures. Technology has been enabled to support the Enterprise Risk Management processes with a focus on optimizing risk exposures and automating risk reporting across the organization.

VIGILANCE

Vigilance Department is headed by the Chief Vigilance Officer (CVO) who administers the supervision and control of all the Vigilance matters in the Corporation. The department carries out focused preventive vigilance activities, which help in ensuring transparent business decisions by the functions. Besides carrying out preventive activities, the major work area of the Department comprises of investigation of complaints received from various sources like Citizens, Stakeholders, Ministry of Petroleum & Natural Gas, Central Vigilance Commission, the Management and other sources etc.

The Department deals mainly with matters related to corruption and matters having âvigilance angle.'' The complaints are handled as per the complaint handling policy stipulated in the Vigilance Manual 2017 of the Central Vigilance Commission. Various operating areas were reviewed for systemic improvements during the year. Apart from investigating complaints, surprise inspections of Depots, Terminals, LPG Plants, Regional Offices, LPG Distributors, Retail Outlets, Tank Trucks, Major Works (CTE Pattern), Tender Review etc. are also carried out. During the year, various focused group-training programs have been conducted for employees.

Vigilance Awareness Week was observed under the central theme for the year âVigilant India, Prosperous India.â Various outreach activities, viz focused group presentations, Quizzes, Drawing/Painting Competitions, Skits/street plays, Workshops, Technical talks, Grievance redressal camps, Gram Sabhas, Rallies/Walkathons, School/College Programs etc. were undertaken during the week.

INDUSTRIAL RELATIONS

Your Corporation, with its progressive approach have maintained very cordial and harmonious Industrial Relations (IR) with its Unions & workmen represented by Unions. Amidst COVID-19 pandemic which affected the businesses across the globe, your Corporation could maintain normal operations at all location despite lockdown and restrictions emanating from increased safety norms & guidelines issued by the Central/State Government from time to time. During this unprecedented pandemic, Officers and workmen represented through Unions have demonstrated utmost commitment & dedication towards fulfillment of the Corporation''s objectives and service to the nation in ensuring uninterrupted supplies of petroleum products.

Your Corporation has successfully concluded the Long Term Settlement (LTS) with Union for workmen in all the three divisions, aided by video conferencing facilities, conducted under the guidance of the Statutory Authorities. Even during the lockdown period, timely salary payment to employees/ contract workmen engaged by the respective Contractors through online/NEFT modes was ensured.

A special medical insurance scheme for all contract workmen and their family members, Group Personal Accident Insurance, Special Ex-gratia scheme were implemented for the frontline COVID warriors namely, contract labourers, LPG delivery-men, Forecourt salesmen at retail outlets, transport crew, security guards etc.

Ministry of Labour and Employment, Government of India issued gazette notification G.S.R. 225(E) dated March 27, 2020 allowing PF withdrawal on account of Epidemic/Pandemic. Your Corporation is one of the establishments who got listed in âTop 10 exempted establishments in terms of amount disbursed for COVID 19 Claims'' as per the list dated April 17, 2020 declared by EPFO Authority.

OFFICIAL LANGUAGE IMPLEMENTATION

Your Corporation promotes usage of Hindi in the business communications by its employees through encouragement and incentives by utilizing various facilities available in the field of Information & Technology including Video Conferencing. To promote the linguistic talent of the employees, awareness about Hindi is created in the offices through online Hindi Competition, Hindi Fortnight, Official Language Conferences and Hindi Workshops etc.

During the year, Department of Official Language, Ministry of Home Affairs, Government of India, has announced Rajbhasha Kirti 1^st Prize to the Corporation''s Hindi House Journal âHP Samacharâ for the year 2018-19. Your Corporation is the coordinator for Town Official Language Implementation Committee (TOLIC) of Mumbai based PSUs since 1983 and thereby guiding 65 PSUs in the field of Official Language Implementation. Other than the TOLIC meetings, officials of different PSUs are trained through conducting various programs such as Hindi Translation, Promotion of Hindi and Regional Language etc.

Your Corporation has continuously been awarded with the Official Language Shield, the best amongst Oil PSUs, by Ministry of Petroleum and Natural Gas, Government of India. The Corporation is awarded with 27 Rajbhasha Awards from Government of India and other Agencies, a record in the entire Oil Industry. Besides this, in the technical field, the Corporation has taken a new initiative and published Multi-Lingual Petroleum Glossary consisting more than 5,000 words from 12 Regional Languages including Hindi & English. The efforts made in Official language implementation were specially appreciated by Ministry of Petroleum and Natural Gas.

CORPORATE SOCIAL RESPONSIBILITY

In the challenging times posed by COVID-19 pandemic, your Corporation reaffirmed its continued commitment towards the society by providing assistance and relief to the poor and vulnerable sections of the society and undertaking interventions inter-alia aimed to support the healthcare & allied infrastructure. As a responsible corporate citizen, our Corporation amplified CSR efforts and collaborated with various stakeholders to support COVID-19 relief measures.

Your Corporation supported the fight against COVID-19 pandemic by contributing to âPrime Minister''s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) and at the same time, undertaking various other relief measures such as distribution of food packets and ration materials, Personal Protective Equipment (PPE) kits. Your Corporation supplemented the largest COVID-19 vaccination drive of Government by providing Cold Chain Equipment viz. Deep Freezer (Small/Large), Walk-in-Freezer, Refrigerated Truck and Ice-Lined Refrigerator to State Health Department

True to its purpose of âDelivering Happiness'', your Corporation continues to undertake projects having strategic connect and synergizing efforts with Government and other stakeholder for collective impact. During the financial year 2020-21, your Corporation undertook the following flagship initiatives:

â¢ Adapt:

Project âAdapt'' aims to enhance the quality of lives of Children with Disabilities (CWD) through provision of online education, individual training and therapeutic treatment. In addition to online educational classes for âChildren with Disabilities'' (CwD), uninterrupted therapy services were provided through Tele-Rehab, which emerged as a key vehicle for delivery of services. This new model of providing online services helped the parents and the beneficiaries cope with the pandemic.

â¢ Nanhi Kali:

Project Nanhi Kali provides holistic development and supports academic pursuit of girl children from tribal and urban slum locations. The project addresses challenges and constraints faced due to gender gap in communities and aim to develop gender equality. During the year, âNanhi Kali'' girls were provided with online remedial classes, material kits, sports curriculum, other guidance & counselling on personal hygiene and career development.

â¢ Kashmir Super-30 (Medical):

This project supports the Sadhbhavna (Goodwill) efforts undertaken by Indian Army in Kashmir valley. This project provides mentoring and coaching to aspiring students from Jammu and Kashmir region for preparing them for various medical entrance exams in the country. This residential training program gives wings to academic aspirations of youth for their career development.

â¢ Centre of Wellness and Excellence - Ladakh Super- 45 (Medical & Engineering):

This project supports Indian Army''s initiative in âWinning Hearts and Minds'' of the local population. This project supports the less-privileged, yet aspiring students of Ladakh region in enabling them to compete in various streams like Engineering, Medical and other career-oriented programs.

â¢ Dhanwantari:

Project Dhanwantari is focused on providing basic healthcare facilities and services at the doorsteps of beneficiaries in remote rural areas of the country through Mobile Medical Vans. The majority of beneficiaries are women, children and elderly whose general health is neglected due to poverty and lack of resources, awareness and facilities.

â¢ Dil Without Bill:

This project supports heart surgeries at free of cost for people with heart ailments from low-income group, particularly children. This project has given life and hope to thousands of families over the years.

â¢ Swachh Bharat Abhiyan:

Your Corporation undertook construction / upgradation of more than 100 toilets and around 250 sources of clean drinking water during the year. Swachhta Pakhwada conducted during the year witnessed enthusiastic participation of various stakeholders in campaign activities with a focus of spreading awareness on COVID-19 appropriate behaviour.

â¢ Skill Development Institutes:

To improve employability and bridge skill-gaps, skill training in various industry-oriented trades are provided to school dropout youth from socio-economic backward communities. Your Corporation has supported Skill India Mission by contributing to Skill Development Institutes at five locations.

â¢ âTransformation of Aspirational Districtsâ program:

Transformation of Aspirational District program, an all-India initiative and unique experiment in ensuring the transformation of under-developed pockets of India was launched by the Hon''ble Prime Minister in January 2018. Anchored in NITI Aayog, this program intends to turn development into a mass movement, facilitated by Governments at different levels: Centre, State and District. Your Corporation supported projects in twenty-seven aspirational districts.

â¢ Other CSR activities:

Your Corporation laid special focus to develop infrastructure and provide facilities in rural areas. Contribution was made to Armed Forces Flag Day Fund for the care, support, welfare and rehabilitation schemes for Ex-Servicemen (ESM) and their dependents.

Awards & Accolades:

Your Corporation has bagged 1^st Prize for Swachhta Hi Sewa (11^th September - 27^th October 2019) campaign instituted by Ministry of Petroleum and Natural Gas. Your Corporation has also bagged âOutstanding Contribution'' Award for Swachhta Pakhwada (1^st - 15^th July, 2020) campaign instituted by Ministry of Drinking Water and Sanitation.

The details of CSR activities of the Corporation containing details of CSR Committee Members, brief outline of the CSR policy, overview of the CSR initiatives, prescribed expenditure, amount spent, etc. that form part of this Report are furnished in Annexure III.

CORPORATE GOVERNANCE

PROCUREMENT OF GOODS & SERVICES FROM MSEs

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 and its amendments thereof. In line with said Policy, your Corporation had set an annual goal of sourcing a minimum procurement of 25% of its total requirements from MSEs and within it, 4% of total requirement has been earmarked for procurement from MSEs, owned by SC/ST entrepreneurs and another 3%, from women entrepreneurs. For the benefit of MSEs, the MSE procurement details are regularly uploaded on Sambandh Portal of Ministry of MSME, besides displaying the Annual Procurement Plan on the Corporation''s website.

Against the above set target for financial year 2020-21, your Corporation has achieved 28.49% ('' 3,425.85 Crore) of procurement of goods & services (other than Crude Oil, Petroleum Products, Logistics (Marine, Railway & Pipeline)) from MSEs. To promote the objectives of procurement from MSEs as laid down in Public Procurement Policy, 26 Vendor Development Programs/ Buyer-Supplier meet for MSEs were conducted during the financial year. During these meets, the Corporation''s procurement processes were articulated through detailed presentation to MSE vendors with an intent to increase awareness of vendor registration process, tendering process, availability of TReDS platform, procurement on GeM platform etc. Implementation of various Government directives/policies of providing relief to MSMEs and promoting indigenisation of products and services was also explained during the programme.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Corporation has ensured compliance with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 & Implementation Guidelines of Corporation.

In coordination with external faculties specialized on the subject, online webinars were conducted during the year, sensitizing the employees and other stakeholders regarding the nuances of said Act, behaviours that constitute an act of sexual harassment, acceptable & unacceptable behaviour, process of complaint, role of Internal Complaints Committee (ICC), etc.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis Report forms part of the Annual Report for the financial year 2020-21.

FINANCIAL STATEMENTS OF SUBSIDIARIES

Pursuant to provisions of Section 129(3) of the Companies Act, 2013, a separate statement containing salient features of the Financial Statements of Subsidiary/Associate/Joint Venture Companies in Form No. AOC-1 is attached along with the Consolidated Financial Statements.

COST AUDIT

The maintenance of Cost Records, as specified under Section 148(1) of the Companies Act, 2013 is mandated and accordingly such accounts and records are made and maintained. The Cost Audit for the financial year 2019-20 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs within the stipulated time for filing.

DIRECTORS

Your Company''s Board presently comprises of 7 Directors. The Whole Time Directors are Shri Mukesh Kumar Surana (Chairman & Managing Director), Shri Pushp Kumar Joshi (Director - Human Resources), Shri Vinod S. Shenoy (Director - Refineries) and Shri Rakesh Misri (Director - Marketing).

The Government Nominee Directors are Shri Sunil Kumar, Ex-Officio, Joint Secretary (Refineries), Ministry of Petroleum & Natural Gas and Dr. Alka Mittal, Director - HR, Oil and Natural Gas Corporation Limited (ONGC), Part-Time Director, representative of ONGC.

The Independent Director is Shri G. Rajendran Pillai.

As per the provisions of Section 152 of the Companies Act, 2013 Shri Sunil Kumar and Shri Vinod S Shenoy are the Directors who are liable

to retire by rotation at this Annual General Meeting and being eligible, offer themselves for re-appointment.

DETAILS OF CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) DURING THE FINANCIAL YEAR 2020-21 AND TILL DATEA) Directors:

â¢ Shri R Kesavan, Director - Finance (Whole-Time Director) has ceased to be Director of your Company effective July 01, 2021 on attaining age of superannuation.

â¢ Dr. Alka Mittal was appointed as Government Nominee Director (Representative of ONGC) on the Board of your Company effective June 17, 2021.

â¢ Shri Subhash Kumar, Government Nominee Director (Representative of ONGC) has resigned from the Board of the Company effective May 20, 2021.

â¢ Shri Amar Sinha and Shri Siraj Hussain have ceased to be Independent Directors of the Company effective September 21, 2020 on completion of their tenure of office of 3 years.

B) KMP:

â¢ Shri Rajneesh Narang, ED-Corporate Finance of the Company was appointed as Chief Financial Officer (CFO) effective July 01, 2021.

â¢ Shri R Kesavan, Director - Finance (Whole-Time Director) and CFO of your Company has ceased to be CFO of the Company effective July 01,2021.

NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2020-21, 11 Board Meetings were held. The details of these Meetings are given in the Corporate Governance Report, forming part of Annual Report for the Financial Year.

MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

In one of the earlier years, on a reference by C&AG during Supplementary Audit of Annual Accounts with regard to payment of shift allowance, your Corporation has represented to Ministry of Petroleum and Natural Gas. Pending clarification, payment of Shift Allowance has been kept in abeyance.

AUDIT COMMITTEE

The present composition of Audit Committee, which requires reporting under Section 177(8) of the Companies Act, 2013 is given as under:

Sl. No.	Name	Category
1	Shri G Rajendran Pillai	Independent Director - Chairman
2	Shri Sunil Kumar	Government Nominee Director -Member
3	Dr. Alka Mittal	Government Nominee Director -Member

The Changes in the Composition of Audit Committee during the Financial Year 2020-21 and till the date of this report are:

1. Dr. Alka Mittal, Government Nominee Director was inducted into the Committee as Member effective 28.07.2021.

2. Shri R Kesavan, Whole Time Director and Member of the Committee effective 23.09.2019 had held this post till he ceased to be Director of the Company effective 01.07.2021.

3. Shri Subhash Kumar, Government Nominee Director and Member of the Committee effective 01.10.2020 had held this post till he ceased to be Director of the Company effective 20.05.2021.

4. Shri G Rajendran Pillai, Independent Director was inducted into the Committee as Chairman effective 01.10.2020.

5. Shri Sunil Kumar, Government Nominee Director was inducted into the Committee as Member effective 01.10.2020.

6. Shri Amar Sinha, Independent Director and Chairman of the Committee effective 19.05.2020 had held this post till he ceased to be Director of the Company effective 21.09.2020.

7. Shri Siraj Hussain, Independent Director and Member of the Committee effective 08.01.2020 had held this post till he ceased to be Director of the Company effective 21.09.2020.

During the year, there were no cases observed where the Board had not accepted any recommendation of the Audit Committee.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (LODR) Regulations, 2015, your Company has appointed M/s. Dholakia and Associates LLP, practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2020-21. The Report of Secretarial Audit in Form

The details regarding the number of women employees vis-a-vis thi total number of employees in each group is given herein under:

Group	Total No. of Employees	No. of Women Employees	% of Women Employees
Management	5,920	707	11.94%
Non-Management	3,528	209	5.92%
TOTAL	9,448	916	9.70%

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Your Corporation, being a Government Company, the compliance of Section 134 (3) (p) is exempted by virtue of MCA Notification dated 05.06.2015 as the annual evaluation of the Performance of the Board, its Committees and of individual Directors are carried out by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MOP&NG) through the process of Memorandum of Understanding entered into for each financial year. Further, performance evaluation of Functional Directors by MOP&NG, takes place annually.

DECLARATION BY INDEPENDENT DIRECTOR

Shri G Rajendran Pillai, the Independent Director on the Board of the Company till the date of this Report has given a declaration that he meets the criteria of independence as laid down under Section 149(7) of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A statement of declaration as required under Section 149(7) of the Companies Act, 2013 has been obtained from him.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Corporation, being a Government Company is exempted to furnish information under Section 134(3)(e) of the Companies Act, 2013 vide MCA Notification dated 05.06.2015.

OPINION OF BOARD REGARDING INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTOR APPOINTED DURING THE YEAR

There has not been any appointment of Independent Director during this financial year.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

Your Corporation, being a Government Company, the remuneration payable to its Key Managerial Personnel and other employees are fixed by the Government of India. However, payment like Performance Related Pay is placed for the approval of Nomination and Remuneration Committee.

No. MR-3 is annexed herewith and marked as Annexure IV. The Report does not contain qualification, reservation or adverse remark except that the Company did not have (a) Woman Director on its Board pursuant to second proviso of sub-section (1) of Section 149 of the Act read with Companies (Appointment and Qualification of Directors) Rules, 2014 and Independent Woman Director pursuant to proviso to Regulation 17(1) (a) of SEBI LODR from 01.04.2020 to 31.03.2021; (b) Required number of Independent Directors on its Board as stipulated under sub-section (4) of Section 149 of the Act, Regulation 17(1) (b) of SEBI LODR and DPE guidelines on Corporate Governance (âDPE Guidelinesâ) for the period from 01.04.2020 to 31.03.2021; (c) Proper composition of Committees namely i) Audit Committee as prescribed under the Act, SEBI LODR and DPE Guidelines and ii) Nomination and Remuneration Committee as prescribed under the Act, SEBI LODR for the period from 21.09.2020 till 31.03.2021; (d) Optimum composition of the Board as number of Executive Directors exceeded the number of Non-Executive Directors as stipulated under the DPE Guidelines and SEBI LODR for the period from 21.09.2020 till 31.3.2021.

In this regard, your Company confirms that being a Government Company, which is under the Administrative Control of Ministry of Petroleum and Natural Gas (MOP&NG), the power to appoint the Directors (including Independent Directors) and finalizing the terms and conditions of appointment vest with Government of India. The matter regarding appointment of required number of Independent Directors/ Independent Woman Director have been taken up with MOP&NG from time to time and the Government is seized of the matter.

COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the financial year 2020-21 in Form No. AOC-2 is annexed herewith and marked as Annexure V.

WEB LINK OF ANNUAL RETURN

By virtue of amendment to Sec 92(3) and 134(3) of the Companies Act, 2013, the Annual Return of the Company is placed on its website which can be accessed in the web link https://www.hindustanpetroleum. com/69thAGM. In view of this, the Extract of Annual Return are not forming part as an attachment to the Directors'' Report.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The details on the performance and financial position of Subsidiary, Associate and Joint Venture Companies are given in Management Discussion & Analysis Report. Further, pursuant to Section 129(3) of

the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of Financial Statements of Subsidiary, Associate and Joint Venture Companies in Form No. AOC-1 form part of the Annual Report for the financial year 2020-21, separately.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATES

As on 01.04.2020, your Corporation was holding 50% shares in its Joint Venture Company HPCL Shapoorji Energy Private Limited (HSEPL), balance 50% being held by SP Ports Private Limited. By virtue of share purchase agreement entered into on 27.03.2021 by your Corporation with its Joint Venture Partner for acquisition of entire stake of the latter in the said Joint Venture and the subsequent share transfer that followed on 30.03.2021. HSEPL has become a wholly owned subsidiary.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the financial year 2020-21, your Corporation did not receive any Order or Direction of any Hon''ble Court or Tribunal or Regulator, which either affects your Corporation''s status as a going concern or which substantially or significantly affects your Corporation''s business operations.

VIGIL MECHANISM / WHISTLEBLOWER POLICY

Your Corporation, being a Government Company is subjected to the CVC Guidelines and the Corporation has a separate Vigilance Department administering the Vigilance matters. Your Corporation has a Whistleblower Policy approved by the Board and the same is placed on the website of the Corporation. The web link of Whistleblower Policy is stated herein below:

Web link: https://www.hindustanpetroleum.com/documents/pdf/ Whistle_Blower_policv.pdf.

DETAILS OF DEPOSITS

Your Corporation has not been accepting any Deposits for the last several years, as specified in Section 73 to Section 76 of the Companies Act, 2013 and therefore there do not call for any disclosure of Deposits as required under Rule 8(5)(v) of Companies (Accounts) Rules, 2014.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed that:

i. In the preparation of the annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

iv. The Directors have prepared the annual Accounts on a going concern basis.

v. The Directors, have laid down internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively.

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to the Corporation''s valued Customers as well as for the overall performance of the Corporation.

The employees of the Corporation have continued to display their total commitment towards the pursuit of excellence. This year has been very different, emotionally challenging and distressing at times as every Employee is a front-line worker, a COVID Warrior ensuring the sustenance of availability of Petroleum Products across the Nation. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Corporation to scale even greater heights.

Your Directors are thankful to the Shareholders for their faith and continued support in the endeavors of the Corporation.

For and on behalf of the Board of Directors

Sd/-

MUKESH KUMAR SURANA Chairman & Managing Director

Date : August 04, 2021

Mar 31, 2019

Directors'' Report

DEAR MEMBERS

On behalf of the Board of Directors, it gives me immense pleasure in presenting to you the sixty-seventh Annual Report on the Performance of the Corporation, together with the Audited Financial Statements for the financial year ended March 31, 2019.

HIGHLIGHTS

(Rs,Crores)

	Consolidated		Standalone
	2018-19	2017-18	2018-19	2017-18
FINANCIAL PERFORMANCE
Sales/Income from Operations	2,95,986.87	2,43,399.40	2,95,712.562,43,226.66
Profit before Depreciation, Interest and Tax (PBDIT)	13,910.14	13,562.42	13,077.21	12,521.39
Depreciation & Amortization Expenses	(3,085.30)	(2,834.40)	(3,012.61)	(2,752.75)
Finance Cost	(785.64)	(617.88)	(725.94)	(566.71)
Profit before Tax (PBT)	10,039.20	10,110.14	9,338.66	9,201.93
Tax Expenses	(3,348.57)	(2,891.86)	(3,310.00)	(2,844.86)
Profit after Tax (PAT)	6,690.63	7,218.28	6,028.66	6,357.07
Balance brought forward from previous year	21,973.01	17,415.73	20,632.77	16,74775
Amount available for Appropriation
Appropriations / Others:
Debenture Redemption Reserve (net)	(1734)	75.78	-	265.13
Dividend	(1,371.44)	(2,321.29)	(1,371.44)	(2,321.29)
Tax on distributed profits	(281.90)	(472.55)	(281.90)	(472.56)
Other Comprehensive Income that will not be reclassified to profit or loss(Net of tax)	12.60	57.06	15.87	56.67
Other Appropriations	(82.17)	-	(82.17)	-
Balance carried forward	26,923.39	21,973.01	24,941.79	20,632.77
SHAREHOLDERS'' VALUE (Rs,)
Earnings per Share	43.91	47.37	39.56	41.72
Cash Earnings per Share	68.09	69.03	63.02	62.54
Book Value per Share	199.50	16756	184.90	15716

PHYSICAL PERFORMANCE (MMT)	2018-19 1	2017-18
Market Sales (including Exports)# Crude Thruput:	38.72	36.89
Mumbai Refinery	8.67	8.64
Visakh Refinery	9.77	9.64
Total Crude Thruput	18.44	18.28

#Market Sales (including exports) as per Ind AS is 38.71 MMT for FY 2018-19 and 36.87 MMT for FY 2017-18.

SALES/INCOME FROM OPERATIONS

Your Corporation has achieved Sales/Income from operations of Rs,2,95,712.56 Crore in 2018-19 as compared to Rs,2,43,226.66 Crore in 2017-18 on standalone basis.

PROFIT

Your Corporation has earned Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) of Rs,13,07721 Crore in 2018-19 as against Rs,12,521.39 Crore in 2017-18 and profit after tax of Rs,6,028.66 Crore in 2018-19 as compared to Rs,6,35707 Crore in 2017-18 on standalone basis.

DIVIDEND

The Board, in its meeting held on February 05, 2019 declared an interim equity dividend of Rs,6.50 per share.

The Board of Directors, after taking into account the Financial Results of the Corporation during the year, have recommended final equity dividend of Rs,9.40 per share (2017-18: Rs,2.50 per share). The total dividend for the year 2018-19 works out to Rs,15.90 per share as against Rs,1700 per share for the year 2017-18.

The amount of proposed dividend totaling to Rs,1,726.82 Crore, inclusive of Rs,294.43 Crore for Corporate Dividend Tax on distributed profits, shall be dispensed from the profit after tax for the year.

INTERNAL RESOURCES GENERATION

The Internal Resources generated during the year were Rs,7,949.88 Crore in 2018-19 as compared to Rs,6,735.53 Crore in 2017-18 on standalone basis.

CONTRIBUTION TO EXCHEQUER

Your Corporation has contributed a sum of Rs,73,350.33 Crore to the exchequer during the year by way of duties and taxes, as compared to Rs,69,751.52 Crore in 2017-18 on standalone basis.

REFINERY PERFORMANCE

Your Corporation''s refineries have been showing sustained improvement in physical performance for the fifth consecutive year by achieving highest ever throughput in 2018-19 with a combined refining throughput of 18.4 MMT surpassing previous year''s throughput of 18.28 MMT that translates into capacity utilization of 117%.

On product front, LPG, Bitumen and LOBS production reached their best ever performance. Mumbai Refinery added a new lube grade Elasto 710 - R in its product pool.

While aspiring for best ever performances, the refineries have never diluted their thrust on safety which brought another laurel to its feathers - best ever safety record for MR since its inception with 24.59 Million Safe Man Hours.

To continue with its commitment towards environment protection, your Corporation has undertaken several revamp/ project activities in both the refineries for compliance to BS-VI regulations. In addition, both refineries have taken up ambitious augmentation initiative to increase Mumbai Refinery capacity from 75 to 9.5 MMTPA and Visakh Refinery from 8.33 to 15 MMTPA along with state-of-art complexity enhancements including bottom up gradation facilities. Field activities for both these projects have already started.

HPCL Rajasthan Refinery Ltd., the green field refinery cum petrochemical project initiative of your Corporation, is steadily progressing with completion of licensor selection of all process units, BDEP and agreements for 10 units. The financial closure of Rs,28,753 Crore. towards debt component of the project was achieved during Feb. 2019. PESO approval received for Overall Plot Plan.

The particulars with respect to conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo are detailed in Annexure I.

The particulars relating to control of Pollution and other initiatives by Refineries are listed in Annexure II.

Operating Performance of Refineries (Refinery-wise):

Parameter	Unit	Mumbai Refinery	Visakh Refinery
Crude Thruput	TMT	8,671	9,773
Capacity utilization	%	115.6	1177
Distillate yield	%	776	74.5
Fuel & Loss	%	708	733
Specific Energy Consumption	MBTU/BBL/ NRGF	82.82	7729
Gross Refinery Margin	$/bbl	5.79	4.31

MARKETING PERFORMANCE

During 2018-19 your Corporation has achieved excellent performance in all marketing verticals - Retail, LPG, Direct Sales, Lubes, Aviation, Natural Gas and Renewable Energy. Your Corporation continues to cross new milestones and achieving the best physical performance in 2018-19 with sales Volume of 38.7 Million Tonnes (including exports), a volume gain of 1.8 Million Tonnes compared to the previous year 2017-18.

In Domestic Sales Segment, your Corporation recorded the best sales volume of 3797 Million tonnes with 4.7 per cent growth over the previous year. With a market share gain of 0.11 per cent, your Corporation increased its market share amongst PSU companies to 21.03 per cent during 2018-19.

In the Motor-Fuel segment, your Corporation has achieved the highest ever sales volume of 24.54 Million Tonnes as against 23.76 Million Tonnes during 2017-18.Your Corporation commissioned 478 new retail outlets during the year with network totaling to 15,440. Your Corporation commissioned 68 new CNG stations in its fold this year, which is highest in recent years. Promoting Digital India initiative, your Corporation recorded 31.3 per cent of the total transactions at retail outlets via digital mode in March 2019, surpassing the target set by Government of India. Your Corporation also achieved 100 per cent automation at all feasible retail outlets, and also replaced 100 per cent old dispensing units with new units.

In LPG business, your Corporation achieved new heights. A record number of 1,018 new distributorships was commissioned during the year, taking the total number of LPG distributorships to 5866. An enrolment of 123.7 Lakhs new Domestic customers has been completed during the year, in which a major share of 101.2 Lakhs customers enrolled under Pradhan Mantri Ujjwala Yojana during 201819. The domestic LPG customer base now stands at a robust 808.7 Lakhs, wherein the domestic fuel quantity supplied during the financial year 2018-19 stands at 5.68 Million Tonnes. Your Corporation commissioned LPG plant in Warangal with a bottling capacity of 60 TMTPA.

In the Aviation Business Line, your Corporation achieved a sales volume of 875 TMT with a remarkable growth of 20 per cent and 0.96 per cent market share gain amongst PSU companies. Aviation Service Facilities was augmented by setting up new fixed facilities at Amritsar, Bhubaneshwar, Raipur and Regional Connectivity Scheme (RCS) location at Kolhapur.

Your Corporation continues to deliver exceptional performance in the profitable Lubricants business segment in the Indian market, which is highly competitive with participation from MNC segment, private sector and public sector. Landmark total Lubricants sales of 652 TMT with 8 per cent growth over the previous year, by which it has retained its No. 1 position for the sixth consecutive year and crossed 600 TMT for the third year in succession. In value added lubes category, your Corporation recorded its highest ever sales of 489 TMT with 12 % growth over the previous year, widening the gap further with the second largest player.

In Natural Gas business, your Corporation emerged as one of the most successful bidders during the 10th round of CGD bidding concluded in Feb 2019. PNGRB awarded authorization to your Corporation for setting up CGD network in nine geographical areas during the 10th round and one geographical area during the 9th round of CGD bidding. Environmental Clearances granted by MoEF for setting up 5 MMTPA LNG Degasification Terminal at Chhara.

Your Corporation continued to focus on enhancing the efficiency and reliability in operations at all operative locations, which has helped to register the highest ever throughput of 52 MMT through its POL installations. Towards leveraging technology in operations, SMART Terminal initiative was rolled out in many locations which would increase efficiency, transparency and safety. To cater to the demand for defence forces, a new Depot at Leh was commissioned.

Maximizing Pipeline transportation, your Corporation has achieved an all-time high pipeline thruput of 21.5 MMT during the year against 20.4 MMT over the previous year. Pipeline capacity and network expansion remain a significant focus area for your Corporation. Several expansion projects are underway with an investment outlay of Rs,5,916 Crore. increasing the mainline capacity to 33.73 MMTPA and pipeline network extension by 1100 Km.

TREASURY MANAGEMENT

The year 2018-19 was a challenging year from Treasury management perspective. Indian Rupee (INR) started on a weak note in April 2018 by depreciating over 2% in the first month of FY 2018-19. INR depreciation continued through the fiscal with depreciation against the USD touching a high of 15% before a series of measures were introduced. With regard to interest rates, the year witnessed two successive hikes of 25 bps each in the Policy Repo Rates by RBI in June 2018 & August 2018 which led to overall hardening of the lending rates by Banks. These were followed by a cut of 25 bps in Policy Repo Rates by RBI in Feb 2019 on the back of rising Global uncertainties and trade tensions. The year also witnessed increase in LIBOR rates due to monetary tightening by US Federal Reserve. The challenges posed by the above factors were proactively and effectively managed to moderate the impact on borrowing cost.

Leveraging your Corporation''s reputation and image in the international market, your Corporation successfully raised a USD 500 million ECB loan at a very competitive rate.

Your Corporation effectively used a variety of borrowing instruments to optimize its cost of borrowings. The short term borrowing requirements was met through Triparty Repo Dealing System (earlier Collateralized Borrowing and Lending Obligation), Commercial Papers, MIBOR Linked Loan and Cash Credit facility from consortium banks. Revolving line of credit in USD was also effectively utilized to manage changes in fund requirements.

Temporary surplus of funds was invested at best rates deriving commensurate income on such investment. These funds were invested in term deposits with approved public sector banks, Collateralized Borrowing and Lending Obligation (CBLO) with CCIL, debt schemes of public sector mutual funds and Treasury Bills.

Your Corporation continued to command international long term issuer rating of "Baa2" with "Stable" outlook from M/s. Moody''s Investors Services and "BBB- "rating with "stable" outlook from Fitch Ratings. Both ratings are at par with sovereign rating. Your Corporation is maintaining highest domestic rating for long term ("AAA" with "stable" outlook) and short term ("A1 ") facilities from CRISIL, India Rating and Research Limited and ICRA.

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate Internal Financial Controls for ensuring orderly and efficient conduct of its business, including adherence to the Corporation''s 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 information, which is commensurate with the operation of your Corporation. As part of this exercise, the design of internal controls and its operating effectiveness, for the key business processes is tested by independent expert. Based on the review carried out, independent expert has stated that there are no material weaknesses noted in Internal Controls over Financial Reporting. The entire activity of review and assessment of Internal Controls was carried out under the guidance of a Steering Committee set-up for this purpose.

RISK MANAGEMENT POLICY

As per your Corporation''s Risk Management Charter and Policy 2007, a robust governance structure has been developed and implemented across the organisation in its journey towards risk intelligence. The Risk Management Steering Committee (RMSC) constituted under the Risk Management Charter and Policy 2007, guides and monitors the Risk management process across the organization. Periodical reviews are held to ensure that risks are controlled through a properly defined framework. The Board is appraised about the risk assessment and mitigation procedures.

The Enterprise Risk Management (ERM) process is aimed at creating a risk culture wherein ''risk consciousness'' is embedded in the decision-making process across the organisation. Technology has been used to integrate and manage the entire process of ERM.

Your Corporation has engaged the services of an independent expert to assist in continued implementation of effective Risk Management framework for providing a holistic view of risks and to facilitate more informed decision-making.

VIGILANCE

Your Corporation has a full-fledged Vigilance Department headed by a Chief Vigilance Officer. The Department functions under the guidelines formulated by Central Vigilance Commission.

Based on the Vigilance Awareness Week''s theme for this year "Eradicate Corruption-Build a new India" and also to promote Preventive Vigilance, various outreach activities were organized to spread awareness among the masses. Large number of citizens took e-Integrity Pledge across the country at various functions organized by Vigilance Department during the year.

Your Corporation has been conferred with the prestigious ''Vigilance Excellence Award-2018'' instituted by Central Vigilance Commission under ''Outstanding'' category for ''Best Institutional Practices including IT Initiatives for Fighting Corruption in the Organization'' by Hon''ble President of India.

Vigilance department coordinated with various agencies like CVC, CBI, MOP&NG etc. Surprise inspections were carried out and systemic improvements were suggested by Vigilance, wherever necessary.

INDUSTRIAL RELATIONS

In your Corporation, as a result of a proactive approach, Industrial Relations (IR) remained harmonious across the Corporation. It''s worth mentioning that not only there was no loss of productivity due to IR issues, the year witnessed productivity increase across locations which amply demonstrate the maturity of the Unions and commitment of employees. Various Settlements were signed with the Unions in the areas of Productivity Enhancement, Redeployment etc. which is the outcome of trust and the healthy IR climate in your Corporation.

Career Development Policy (CDP) settlements for Visakh Refinery and Mumbai Refinery were signed in April''18 and May''18 respectively and implemented successfully within the time frame agreed.

In order to attract contractors who are in position to provide better services and higher productivity through engaging experienced and efficient workman, your Corporation introduced "Travelling Allowance" payable to the contract workmen engaged under respective contractor(s) at Corporation''s location basis the actual attendance. Your Corporation also took proactive steps to ensure that all the contract workmen were covered under Pradhan Mantri Jan Dhan Yojana and Prime Minister Suraksha Beema Yojana. To promote Digital India and cashless economy, it was ensured that all Contract Labours deployed across the Corporation are paid their wages thru'' NEFT Further, various programs across the Corporation were organized for Contract workmen so that they can use various modes of cashless payments.

At your Corporation, we believe that safety and wellbeing of all stake holders including Contract Workmen is of paramount importance. Under the Prerna program, a unique initiative of the Corporation to imbibe safe work culture and improve well-being of contract workmen, 185 Prerna Programs covering 9,194 Contract workmen were conducted during year 2018-19.

OFFICIAL LANGUAGE IMPLEMENTATION

Your Corporation gives significant importance towards implementation of Official Language. Keeping in mind the harmony, encouragement and motivation, necessary compliance of constitutional provisions pertaining to Official Language is ensured by using Hindi as a business language. By using modern technology use of Hindi is ensured in the field of Information Technology.

Through, All India Hindi Mahotsav, Official Language Conferences, competitions and Hindi workshops, your Corporation creates awareness among its employees for progressive use of Hindi. Your Corporation has headed Mumbai (PSU) Town Official Language Implementation Committee since 1983. Thus, your Corporation has been leading 65 offices of Central PSU''s at Mumbai through its regular meetings/conduct of programs which have been appreciated by Secretary-OL, GOI & other senior dignitaries from time to time.

In the year 2018-19, your Corporation has bagged 57 awards in Official Language Implementation, including "Rajbhasha Kirti Pratham Puraskar" and Petroleum and Natural Gas OL Shield for last two consecutive years thus maintaining a lead position in the entire Oil Industry.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation has always believed in creating shared value and being a catalyst of transformation through its CSR endeavors. Your Corporation is committed to delivering happiness by making meaningful changes in the lives of people thereby fulfilling its social commitment. Continuing its efforts to create a healthy, educated and empowered nation, various initiatives in the focus areas of Child care, Education, Health care, Skill Development, Sports, Environment and Community Development were undertaken for holistic societal development in collaboration with community/local administration.

Being a responsible corporate citizen, the constant effort is to maximize positive impact of the initiatives by integrating and internalizing CSR into the core of business operations. National Development Policies, Sustainable Development Goals and flagship schemes of Government of India have been the contributing factors to the CSR initiatives. Your Corporation has always believed in adopting strategies aimed at ''Bridging the Gaps'' by identifying gaps in the existing system and narrowing them rather than creating new parallel systems.

Your Corporation undertook various development initiatives in FY 2018-19 which helped to reach out to large sections of marginalized society. Driven by the sheer passion and altruism of the committed employees, the focused efforts of the Corporation through innovative, value-driven and well-designed CSR projects have been able to transform the lives of marginalized and less privileged.

Special focus was laid on supporting development initiatives in Inspirational Districts identified by NITI Aayog / Department of Public Enterprises and creation of sanitation infrastructure and other initiatives under Swachh Bharat Abhiyan.

The projects under Education focus area viz. Nanhi Kali, Unnati, Akshayapatra and Agastya have been able to impact the lives of school going children by supporting their educational pursuits.

Project ADAPT aims to create a model of inclusivity and equal opportunity and offers special education, state-of-the-art therapies along with skill development opportunities to differently abled children in an enabling environment in order to bring them into mainstream.

In the focus area of health care, the projects Dil without Bill, Suraksha and Dhanwantari aim to provide preventive and curative health care facilities. As a part of Skill India Mission, Project Swavalamban provides skill training to youth and school dropouts from under-privileged areas in various trades like mechanical, electrical, construction, geriatric care etc. with an aim to enhance their employability.

Various activities were undertaken under Swachh Bharat Abhiyan focusing on creation of sanitation infrastructure in schools and community, provision of clean drinking water facilities etc. More than 850 toilets in school, IHHL and community have been constructed under Swachh Bharat Abhiyan. In addition to being associated with Swachh Iconic Places initiative (Golden Temple, Amritsar), Open Defecation (ODF) project was also undertaken in association with Municipal Corporation, Amritsar.

In order to strengthen the ''Skill India'' initiatives of the Government of India, contribution was made to six Skill Development Institutes at Rae Bareilly, Ahmadabad, Visakhapatnam, Kochi, Guwahati and Bhubaneshwar for the promotion of higher education and employability skills. Other unique initiatives were also undertaken which included long term skilling of differently abled youth and learning labs for differently abled youth in Khordha district, Setting up of Modular furniture skill development-cum-production center in YSR Kadapa district in association with Andhra Pradesh Prison Department.

To empower academic talent, scholarships amounting to Rs,6.21 Crore were distributed to meritorious SC, ST, OBC and PWD students. Contribution was also made to Armed Forces Flag Day Fund for welfare of ex-servicemen, war-widows and their dependents and the institutions involved in their rehabilitation.

The employees at business locations across the length and breadth of the country actively participated in Swachhta Pakhwada and ''Swachhta Hi Sewa'' campaigns and took up various innovative activities in association with local administration, institutes, community and society at large. Various innovative initiatives through radio, virtual campaigns etc. were undertaken to promote sanitation and cleanliness among masses. For the first time, International Day of Persons with Disabilities (3rd Dec.) was observed in the Corporation to promote inclusivity and generate awareness among stakeholders. The 16th edition of Tata Mumbai Marathon saw an enthusiastic participation of more than 200 employees who came forward to support differently-abled children in "Champions with Disability" and other race categories.

Your Corporation also contributed Rs,31.77 Crore towards Pradhan Mantri Ujjwala Yojana (PMUY) which aims to safeguard health of women and young children by providing them clean cooking fuel.

These untiring CSR efforts of your Corporation were recognized with awards and accolades at various forums. Your Corporation was ranked among top three best performing CPSEs (Oil & Gas) for its contribution towards Swachhta Pakhwada by MoP&NG. Other notable awards included Energy and Environment Foundation Global CSR Award 2019, Apex India CSR Excellence Award, Swachh Bharat Award in the category of ''Sanitation - Infrastructure Building''.

The details of CSR activities of the Corporation containing details of CSR Committee Members, brief outline of the CSR policy, overview of the CSR initiatives, prescribed expenditure, amount spent etc. forming part of Director''s report are provided in Annexure III.

CORPORATE GOVERNANCE

PROCUREMENT OF GOODS & SERVICES FROM MSES

In line with the Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012 and amendment order 2018, for the year 2018-19 against the set target of 25%, your Corporation has achieved 32.87% (Rs,4,315.20 Crore) procurement of goods and services from Micro & Small Enterprises (MSEs).

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has complied with provisions relating to the constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. In view of the reassignments and superannuation/separation/completion of 3 years from the appointment of some of the ICC committee members in respect of various zones/refineries, the committees were reconstituted. Various workshops were organized across Corporation to educate employees on the subject.

MANAGEMENT''S DISCUSSION & ANALYSIS REPORT

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

FINANCIAL STATEMENTS OF SUBSIDIARIES

In terms of Proviso to Section 136 (1) of the Companies Act, 2013, your Corporation will place separate audited accounts in respect of each of its subsidiaries on its website & also provide a copy of separate audited financial statement in respect of each of its subsidiaries, to any shareholder of the Company who asks for it. The Financial Statements of the subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013, a separate statement containing salient features of the Financial Statement of Subsidiary/Associate/Joint Venture Companies in Form AOC-1 is attached along with Financial Statements.

COST AUDIT

Maintenance of Cost Records as specified by the Central Government under section 148(1) of the Companies Act 2013 is required by the Company and accordingly, such accounts and records are made and maintained. The Cost Audit for the financial year 2017-18 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs before the stipulated date of filing.

DIRECTORS

Your Corporation''s Board presently comprises of 12 Directors. The Whole Time Directors are Shri Mukesh Kumar Surana (Chairman & Managing Director & additional charge of Director Finance), Shri Pushp Kumar Joshi (Director - Human Resources), Shri S. Jeyakrishnan (Director - Marketing) and Shri Vinod S. Shenoy (Director - Refineries).

The Government Nominee Director is Shri Subhash Kumar. Shri Sandeep Poundrik was an Ex-officio Director on the Board till May 01, 2019. The Part Time Non Official Directors (Independent) are Shri Ram Niwas Jain, Smt. Asifa Khan, Shri G.V. Krishna, Dr. T N. Singh, Shri Amar Sinha and Shri Siraj Hussain.

As per the provisions of Section 152 of the Companies Act, 2013, Shri Vinod S. Shenoy and Shri Subhash Kumar are the Directors who are liable to retire by rotation at the next

Annual General Meeting and being eligible offer themselves for re-appointment.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Appointment:

- Shri Subhash Kumar was appointed as a Government Nominee Director, by Government of India (representative of Oil and Natural Gas Corporation Limited) (ONGC) as Part-Time Director with effect from May 22, 2018.

- Shri Ram Niwas Jain was re-appointed as an Independent Director on the Board of your Corporation effective November 20, 2018 for a period of one year from the date of completion of his existing tenure i.e. November 19, 2018.

- Shri R. Kesavan, Executive Director - Corporate Finance was appointed as Chief Financial Officer (CFO) of the Corporation with effect from March 01, 2019.

- Shri V. Murali, Dy. Company Secretary was appointed as Company Secretary of the Corporation with effect from December 01, 2018.

Cessation ship:

- Ms. Sushma Taishete, Government Nominee Director has ceased to be Director of the Corporation with effect from May 07, 2018.

- Shri J. Ramaswamy, Director Finance and also Chief Financial Officer (CFO) of the Corporation superannuated from the services of the Corporation on February 28, 2019 and hence ceased to be Director & CFO of the Company with effect from March 01, 2019.

- Shri Sandeep Poundrik, Government Nominee Director has ceased to be Director of the Corporation with effect from May 01, 2019 on ceasing to be an offical of the administrative ministry i.e. Ministry of Petroleum and Natural Gas (MOP&NG)

- Shri Shrikant M. Bhosekar, Company Secretary superannuated from the services of the Corporation on November 30, 2018.

The Board places on record its sincere appreciation for the valuable services rendered by Ms. Sushma Taishete, Shri J. Ramaswamy and Shri Sandeep Poundrik as Directors during their tenure in the Corporation.

NUMBER OF MEETINGS OF THE BOARD

During the year, 13 Board meetings were held. The details of the Board Meetings are given in Corporate Governance Report.

MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

Your Corporation, being a Govt. Company, is exempted to furnish information under Section 197 of Companies Act, 2013 vide Ministry of Corporate Affairs (MCA) Notification dated 05.06.2015.

There was a reference by C&AG during review of accounts with regard to payment of shift allowance. In pursuance of the same, payment of shift allowance has been kept in abeyance and the Corporation has represented the matter for reconsideration by Competent Authority.

The details regarding the number of women employees vis-a-vis the total number of employees in each group is also given as herein below:

Group	Total No. of Employees	No. of Women Employees	% of Women Employees
Management	6,187	720	11.64%
Non-
Management	4,052	249	6.15%
TOTAL	10,239	969	9.46%

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Your Corporation being a Government Company, the performance evaluation of the Performance of the Company, its Board and indirectly its Committee is carried out by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MOP&NG) through the process of Memorandum of Understanding in each Financial Year. Further there is also performance evaluation of Functional Directors by MOP&NG.

Compliance of Section 134 (3) (p) is exempted for Government Companies as Performance Evaluation of Directors is carried out by MOP&NG as per its own evaluation methodology.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent directors have given a declaration that they meet the criteria of independence as laid down under Section 149(6) of Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Statement of declaration required under Section 149(7) have been obtained from the Independent Directors for the Financial Year 2019-20

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Corporation being a Government Company, is exempted to furnish information under Section 134(3)(e) of the Companies Act, 2013 vide MCA Notification dated 05.06.2015.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSON AND OTHER EMPLOYEE

Your Corporation being a Government Company, the remuneration payable to Key Managerial Persons and other employees are fixed by the Government of India. However, payment like Performance Related Pay is placed for the approval of Nomination and Remuneration Committee.

AUDIT COMMITTEE

The composition of Audit Committee as required under section 177(8) of the companies Act, 2013 is given as under:

Sl. No.	Name	Category
1.	Shri Ram Niwas Jain	Independent Director -Chairman
2.	Shri G.V Krishna	Independent Director -Member
3.	Dr. T N. Singh	Independent Director -Member
4.	Shri Amar Sinha	Independent Director -Member
5.	Shri Mukesh Kumar Surana (holding additional charge of Director Finance effective March 01, 2019)	Whole Time Director -Member

The recommendations made by the Audit Committee during the year were accepted by the board.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company has appointed M/s Dholakia & Associates LLP, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the Financial Year 2018-19. The Secretarial Audit Report is annexed herewith as Annexure IV. There is no qualification, reservation or adverse remark made by the Practicing Company Secretary in his Secretarial Audit Report except that the Company did not have Independent Directors on its Board as required under regulation 17(1)(b) of SEBI LODR, 2015 for the period from April 01, 2018 to February 20, 2019.

In this regard the company has confirmed that being a Government Company, which is under the Administrative Control of Ministry of Petroleum and Natural Gas (MOP&NG) the power to appoint the Directors (including Independent Directors) and the terms and conditions of appointment vest with the Government of India. The matter regarding appointment of required number of Independent Directors have been taken up with MOP&NG from time to time and the Government is seized of the matter.

COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS

The Company has complied with applicable Secretarial Standards in respect of Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Company''s Act, 2013 read with Rule 12(1) of the Companies (Management & Administration) Rules 2014, an extract of the Annual Report is annexed as Annexure VI. The same is also hosted on the website of the Company www.hindustanpetroleum.com

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the year 2018-19 are enclosed as Annexure V

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The details on the performance and financial position of Subsidiary, Associate and Joint Venture Companies are given in Management Discussion & Analysis Report. Further, pursuant to Section 129(3) of the Companies Act, 2013 read with Rule (5) of the Companies (Accounts) Rules, 2014, the salient features of Financial Statement of Subsidiary and Joint Ventures in Form AOC-1 forms part of the Annual Report separately.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE THE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE

Joint Venture company incorporated during 2018-19:

One Joint Venture Company HPOIL Gas Private Limited (HOGPL) was incorporated on 30.11.2018 with Hindustan Petroleum Corporation Ltd (HPCL) and Oil India Ltd (OIL) holding 50% equity each. The JV was set up for City Gas Distribution network in Ambala - Kurukshetra (Haryana) and Kolhapur (Maharashtra)

Joint Venture company dissolved during 2018-19:

One Joint Venture of HPCL Petronet India Limited (PIL) has commenced voluntary winding up on 30.08.2018. Hindustan Petroleum Corporation Ltd. (HPCL) holds an equity of 16% in PIL.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the Financial Year 2018-19, there is no Order or Direction of any Court or Tribunal or Regulator which either affects your Corporation''s status as a going concern or which substantially or significantly affects your Corporation''s business operations.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Corporation, being a Government Company is subjected to the CVC Guidelines and the Corporation has a separate Vigilance Department administering the Vigilance matters.

Your Corporation has a Whistle Blower Policy approved by the Board and the same is placed on the website of the Corporation. We blink of whistle blower policy is stated herein below:

Web link: https://www.hindustanpetroleum.com/documents/ pdf/Whistle_Blower_policy.pdf

DETAILS OF DEPOSITS

	Particulars	Amount
		(Rs, Crore )
i)	Deposits accepted during the year	NIL
ii)	Deposits remaining unpaid or unclaimed as at the end of the year	NIL
iii)	Default in repayment of deposit or payment of Interest thereon during the year	NIL

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, it is hereby confirmed that:

i. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

ii. The Directors have 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 the profit and loss of the company for that period.

iv. The Directors have prepared the Annual Accounts on a going concern basis.

v. The Directors, have laid down internal financial controls to be followed by the Company and that such Internal

Financial Controls are adequate and are operating effectively.

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Board of Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, Petroleum Planning & Analysis Cell and the State Governments.

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the Country towards improving the service to our valued customers as well as for the overall performance of the Corporation.

Your Directors are thankful to the Shareholders for their faith and continued support in the endeavors of the Corporation.

For and on behalf of the Board of Directors

Sd/-

MUKESH KUMAR SURANA

Chairman & Managing Director

Date: 20^th May, 2019

Mar 31, 2018

DEAR MEMBERS

The behalf of the Board of Directors, it gives me immense pleasure in presenting to you the sixty-sixth Annual Report on the Performance of the Corporation, together with the Audited Financial Statements for the financial year ended March 31, 2018.

HIGHLIGHTS

(Rs. / Crores)

	Consolidated		Standalone
	2017-18	2016-17	2017-18	2016-17
FINANCIAL PERFORMANCE
Sales/Income from Operation	2,43,399.40	2,13,904.15	2,43,226.66	2,13,488.95
Profit before Depreciation, Interest and Tax (PBDIT)	13,562.42	14,583.03	12,521.39	12,091.77
Depreciation & Amortization Expenses	(2,834.40)	(2,776.37)	(2,752.75)	(2,535.28)
Finance Cost	(617.88)	(609.24)	(566.71)	(535.65)
Profit before Tax (PBT)	10,110.14	11,197.42	9,201.93	9,020.84
Tax Expenses	(2,891.86)	(2,961.60)	(2,844.86)	(2,812.04)
Profit after Tax (PAT)	7,218.28	8,235.82	6,357.07	6,208.80
Balance brought forward from previous year	17,415.73	13,382.37	16,747.75	14,740.12
Amount available for Appropriation
Appropriations\ Others:
Debenture Redemption Reserve (net)	75.78	-	265.13	-
Dividend	2,321.29	(3,477.70)	2,321.29	(3,477.70)
Tax on distributed profits	472.56	(707.98)	472.56	(707.98)
Other Comprehensive Income that will not be reclassified	57.06	(16.78)	(56.67)	(15.49)
to profit or loss(Net of tax)
Other Appropriations	-	-	-	-
Balance carried forward	21,973.01	17,415.73	20,632.77	16,747.75
SHAREHOLDERSâ VALUE O
Earnings per Share	47.37	54.05	41.72	40.74
Cash Earnings per Share	69.03	77.37	62.54	61.51
Book Value per Share	167.56	138.28	157.16	133.53

PHYSICAL PERFORMANCE (MMT)	2017-18	2016-17
Market Sales (Including Exports)#	36.89	35.22
Crude Thruput:
Mumbai Refinery	8.64	8.51
Visakh Refinery	9.68	9.30
Total Crude Thruput	18.28	17.81

#Market Sales (including exports) as per Ind AS is 36.87 MMT for FY 2017-18 and 35.23 MMT for FY 2016-17.

SALES/INCOME FROM OPERATIONS

Your Corporation has achieved Sales/Income from operations of Rs.2,43,226.66 crores in 2017-18 as compared to Rs.2,13,488.95 crores in 2016-17 on standalone basis.

PROFIT

Your Corporation has earned Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA) of Rs.12,521.39 crores in 2017-18 as against Rs.12,091.77 crores in 2016-17 and profit after tax of Rs.6,357.07 crores in 2017-18 as compared to Rs.6,208.80 crores in 2016-17 on standalone basis.

DIVIDEND

The Board, in its meeting held on February 09, 2018 declared an interim dividend of Rs.14.50 per share.

The Board of Directors, after taking into account the Financial Results of the Corporation during the year, have recommended dividend of Rs.2.50 per share (2016-17 : Rs.1.10 per share). The total dividend for the year 2017-18 works out to Rs.17.00 per share as against Rs.30.00 per share for the year 2016-17.

The amount of proposed dividend totaling to Rs.459.26 Crores, inclusive of Rs.78.31 Crores for Corporate Dividend Tax on distributed profits, shall be dispensed from the profit after tax for the year.

BONUS SHARES

The Board of Directors in their meeting dated 26th May, 2017 and pursuant to the approval of Shareholders through Postal Ballot, have issued Bonus shares in the ratio of one equity share of Rs.10 each for two existing equity shares of Rs.10 each in the month of July 2017.

INTERNAL RESOURCES GENERATION

The Internal Resources generated during the year were Rs.6,735.53 Crores as compared to Rs.5,534.65 Crores in 2016-17 on standalone basis.

CONTRIBUTION TO EXCHEQUER

Your Corporation has contributed a sum of Rs.69,751.51 Crores to the exchequer during the year by way of duties and taxes, as compared to Rs.67,451.87 Crores in 2016-17 on standalone basis.

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Corporation has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The performance of the Corporation for the year 2017-18 qualifies for âExcellentâ rating basis self-evaluation.

REFINERY PERFORMANCE

FY 2017-18 has carried forward the growth profile for your refineries and shown a remarkable performance for the third consecutive year. This sterling performance has recorded the best ever crude processing with a combined refining throughput of 18.3 MMT surpassing previous yearâs thruput of 17.8 MMT with a capacity utilization of 115%.

Higher crude processing translated into enhanced production of Petroleum Products with your refineries recording best ever MS, HSD and LOBS production levels. Towards diversification of products Mumbai refinery has also added new grades of Lube product Elasto 710 - R and Elasto Supreme - H (RAE).

For the first time, USA crude âMars Blendâ was purchased by your Corporation and processed at Visakh refinery. Extending the pioneering effort towards usage of Grid power, Mumbai Refinery becomes first amongst PSUs to enter into power purchase agreement for 10 MW Green power from NTPC Vidyut Vyapar Nigam Ltd.

Continuing its focus towards a safe and secure work environment, both refineries have put in place a robust system to bring in safety awareness amongst personnel in their respective assignments on a regular basis. Both refineries have undertaken safety management evaluation by external agencies. In this year Mumbai refinery has achieved best ever safety record since its inception with 21.54 Million Safe Man Hours.

Refineries have planned capacity enhancement under Mumbai Refinery Expansion Plan (MREP) to 9.5 MMTPA and Visakh Refinery Modernization Plan (VRMP) to 15 MMTPA. Backend activities like technology and licensor selection, BDEP are completed and orders finalized for Major Process units, utilities and long lead items for both these projects. The project includes Bottoms Upgradation and BS VI fuel production in compliance to GOI guidelines for implementation by 1st April 2020.

The green field refinery cum petrochemical project at Rajasthan has picked stride and âCommencement of workâ for Rajasthan Refinery Project was inaugurated by Honâble Prime Minister on 16.01.2018. For petrochemical complex PCPIR at Kakinada, pursuant to a MoU between GoAP GAIL & HPCL, detailed feasibility and financial appraisal study for petrochemical complex at Kakinada was completed.

Your Corporationâs R&D Centre (HPGRDC) was conferred as âR&D Company of the Yearâ from âThe Energy & Climate Initiatives Societyâ at âGlobal Refining & Petrochemicals Congressâ. HPGRDC has worked on number of technologies /products viz. H2 PSA Technology, SprayMax FCC Feed Nozzle, HP-CORMIT, HP DLA, HP DWA, HP-TRAE, HPFurnOKare, HP-ENOCT, HP-DAK and HP2FCC Catalyst. During 2017-18, 14 Indian and 4 International Patents have been filed by HPGRDC

The particulars with respect to conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo are detailed in Annexure I.

The particulars relating to control of Pollution and other initiatives by Refineries are listed in Annexure II.

Operating Performance of Refineries (Refinery-wise):

Parameter	Unit	Mumbai Refinery	Visakh Refinery
Crude Thruput	TMT	8,641	9,635
Capacity utilization	%	115.2	115.7
Distillate yield	%	77.4	74.5
Fuel & Loss	%	7.2	7.14
Specific Energy	MBTU/BBL/	84.38	77.33
Consumption	NRGF
Gross Refinery Margin	$/Bbl	7.40	6.20

MARKETING PERFORMANCE

The year 2017-18 saw your Corporation doing exceedingly well across all business verticals -Retail, LPG, Direct Sales, Aviation, Lubes, Gas and Renewables marketing streams. Your Corporation has reinforced its winning streak, by recording the best ever physical performance during 2017-18, by achieving a sales volume of 36.9 Million Tonnes (including exports), compared to sales of 35.2 Million Tonnes during the previous year 2016-17.

In the Domestic sales segment, your Corporation recorded a growth of 4.4% over previous year volume with market share of 23.66% (excluding Petcoke/ LNG) amongst PSU companies as on 31st March, 2018.

In the Motor-Fuel segment, your Corporation has achieved a sales volume of 23.76 Million Tonnes as against 22.78 Million Tonnes during 2016-17. Your Corporation commissioned 669 new retail outlets, out of which 256 outlets cater to customers in rural area, crossing the magic mark of 15,000 retail outlets and the network totalling to 15,062 outlets. Under Digital India initiative, impressive 96.4% retail outlets were provided with availability of three digital payment modes. Further, your Corporation completed automation at 3,558 retail outlets which is the highest amongst OMCs.

Domestic LPG marketing continued to be a thrust area for your Corporation. An enrolment of 77.20 Lakhs new LPG Gas (Domestic) customers has been completed during the year, which includes 41.25 Lakhs customers enrolled under Pradhan Mantri Ujjwala Yojana during 2017-18. Your Corporationâs domestic LPG customer base now stands at a robust 692.8 Lakhs, wherein the domestic fuel quantity supplied during the financial year 2017-18 stands at 5.28 Million Tonnes. The other government initiative âGive It Upâ campaign was also a thrust area for your Corporation, which has helped in a significant way to promote the PMUY programme. Your Corporation was the first Oil Marketing Company to roll out owned LPG rakes under Liberalised Wagon Investment Scheme (LWIS) of the Ministry of Railways. Your Corporation commissioned Panagarh LPG plant with a bottling capacity of 250 TMTPA which is the biggest LPG plant in Asia.

In the Aviation business line, your Corporation achieved a sales volume of 729 TMT with growth of 5.4%. During 2017-18, three new ASFs at Srinagar, Tirupati and Patna were commissioned. Under Regional Connectivity Scheme, 3 new locations were comissioned at Vidyanagar, Jalgaon and Mundra.

Your Corporation continues to cross new milestones in the significantly profitable Lubricants business segment in the Indian market, in which players from the MNC segment, private sector and public sector are very active. Your Corporation achieved a landmark total Lubricants sales of 603 TMT and has retained its No. 1 position for the fifth consecutive year and crossed 600 TMT for the second year in succession. Your Corporation has commenced lube marketing in Myanmar

In the emerging Natural Gas Business, a consortium of HPCL & OIL has been authorized by PNGRB for setting up of CGD network in Kolhapur and Ambala-Kurukshetra. In the renewable energy front, your Corporation commissioned 750 kW Capacity Solar Captive Plant at Bahadurgarh POL terminal.

Your Corporation continued to focus on enhancing the efficiency and reliability in operations of the Operations, Distribution and Engineering locations, which has helped to register the highest ever throughput of 50 MMT through its POL installations. New depot at Nalagarh was commissioned during the year taking the total of the operating POL installations to 82. Various new initiatives were launched during this year including SMART Terminal concept which would increase efficiency, transparency and safety, leveraging technology to maximize accuracy at supply points by minimizing human error

Simultaneously, your Corporation has also achieved an alltime high pipeline thruput of 20.4 MMT during the year, which commensurately aided in minimizing the product placement costs. Commissioning of Ramanmandi Bhatinda Pipeline capacity augmentation and direct pumping facility at Bahadurgarh-Trikrikalan pipeline commenced.

In support of Swachh Bharat Abhiyan (SBA) during the year, your Corporation constructed 1,956 number of clean Toilets in Retail Outlets on SH/NH with separate facilities for men/women.

A detailed discussion of the performance of the Marketing function is given in the Management Discussion & Analysis.

Goods and Service Tax (GST) has been successfully rolled out in your Corporation w.e.f. 01st July 2017. This touched a large number of IT systems including ERF! It involved design and development of a number of new processes and applications, enhancement of existing processes to ensure compliance, data migration and generation of output as required by GSTN. All this was implemented with minimum change for end User

TREASURY MANAGEMENT

During the year, your Corporation has successfully issued a maiden foreign currency bond of USD 500 Million at semi-annual coupon rate of 4.00 percent p.a. for a period of 10 years. The issue was oversubscribed more than 6 times with a final order book size over USD 3 billion from close to 225 investors accounts. Issue also has achieved a price tightening of 32.5 bps over an initial price guidance which is one of largest tightening seen for any Investment Grade issuer out of India in recent years. The issue eventually priced on the tighter end at UST10 167.50 bps.

Leveraging your Corporationâs reputation and image in the international market, your Corporation was able to re-finance high cost ECB loans to the tune of US$ 500 million at a significantly lower cost besides extending their maturity

Your Corporation effectively used a variety of borrowing instruments to optimize its cost of borrowings. The short term borrowing requirements was met through Collateralized Borrowing and Lending Obligations (CBLO), Commercial Papers (CP), MIBOR Linked Loan and Cash Credit facility from consortium banks. Revolving line of credit in USD was also effectively utilized to manage changes in fund requirement.

Temporary surplus of funds was invested at best rates deriving substantial income on such investment. These funds were invested in term deposit with approved public sector and other scheduled banks (other than Cooperative Banks), debt schemes of public sector mutual funds and Treasury Bills.

Your Corporation has commanded best possible international long term issuer rating of âBaa2â with âStableâ outlook from M/s. Moodyâs Investors Services and âBBB- ârating from Fitch Ratings with âstableâ outlook. Both ratings are at par with sovereign rating. In addition to maintaining highest domestic rating for long term and short term facilities from CRISIL and India Rating and

Research Limited, during the year, your Corporation has obtained from ICRA a long-term rating of âAAAâ with âstableâ outlook and a short-term rating of âA1 â to the bank facilities, Non-Convertible Debentures and Commercial Papers programme of HPCL.

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate Internal Financial Controls for ensuring the orderly and efficient conduct of its business, including adherence to the Corporationâs 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 information, which is commensurate with the operation of your Corporation. As part of this exercise, the design of internal controls, and its operating effectiveness, for the key business processes is tested by independent experts. Based on the review carried out, independent experts have confirmed that they are satisfied with the effectiveness and adequacy of Internal Controls over Financial Reporting. The entire activity of review and assessment of Internal Controls was carried out under the guidance of a Steering Committee set-up for this purpose.

RISK MANAGEMENT POLICY

Risk is inherent to all businesses and the key to success is to anticipate, take and manage the right risks. In todayâs VUCA (Volatile, Uncertain, Complex and Ambiguous) world, the external and internal environment is changing at an ever increasing pace and which, in turn, requires businesses to not only manage the existing risks but anticipate emerging risks and deploy mitigating strategies on a continuous basis. It is imperative for businesses to design a robust enterprise risk management framework to identify all existing and emerging risks, minimize the impact and seize the opportunities created by these continuously evolving changes.

Your Corporation has adopted a well-defined process for managing its risks on an ongoing basis and for conducting the business in a risk conscious manner There are defined processes for identification, assessment and mitigation of risks on an ongoing basis. Risk assessment is considered as critical input for decision making related to strategy formulation and capital allocation.

Your Corporation has also leveraged technology to integrate and automate the entire process of enterprise risk management. Your Corporation has also engaged the services of an independent expert to assist in continued implementation of effective Risk Management framework and improve the framework further These self-regulatory ERM processes and procedures form part of our Risk Management Charter and Policy, 2007.

Risk Management Steering Committee (RMSC) continues to provide its guidance in this regard. Your Corporation has put in place mechanism to inform Board Members about the risk assessment and minimization procedures, and periodical review to ensure that executive management controls risks by means of a properly identified framework.

VIGILANCE

During the year, as a part of Preventive Vigilance outreach activity, various campaigns were run for administering E-Integrity Pledge. More than 2.70 lakhs E-Integrity pledges were taken by employees and other stakeholders like vendors, dealers, customers etc. thru e-kiosks, LPG consumer IVRS etc

Interactions with employees including new recruits and other stakeholders were held. Surprise inspections were carried out. Coordination with agencies like CBI, CVC, Vigilance wing of MOP&NG etc. was done apart from carrying out investigation of complaints received from offices of MOP&NG, CVC, CBI and other sources.

During the year, your Corporationâs Vigilance Department was conferred with Vigilance Excellence Award in the Outstanding category from the Central Vigilance Commission (CVC).

Review of several operating areas for system improvement was also carried out during the year

INDUSTRIAL RELATIONS

As a result of a proactive approach, Industrial Relations remained harmonious across the Corporation. It is worth mentioning that not only was there no loss of productivity due to IR issues, but also this year witnessed productivity increase across locations which amply demonstrate the maturity of our Unions and commitment of employees. Various Settlements were signed with the Unions in the areas of Productivity Enhancement, Redeployment etc. which is the outcome of Trust and the healthy IR climate in your Corporation.

Union representatives play a major role and act as communication channel/change agents for communicating and implementing of various policies and initiatives. Therefore, it is imperative that the various initiatives and policies are shared with the important stakeholder so as to communicate with the non-management employees apart from our regular communication channels. In this regard 8 workshops were held under the program âHP Connectâ across all zones/refineries in which 236 employees were covered. Moreover, in order to develop the leadership skills of union leaders a week long program was conducted at Hyderabad.

Your Corporation took proactive steps to ensure that all our contract workmen were covered under Pradhan Mantri Jan Dhan Yojana and Prime Minister Suraksha Beema Yojana. To promote Digital India and cash less economy, it was ensured that all Contract Labour deployed across the Corporation are paid their wages through NEFT. Further, various programs across the Corporation were organized for Contract workmen to enable them use various modes of cashless payments.

At your Corporation, we believe that safety and wellbeing of all stake holders including Contract Workmen is of paramount importance. Under the (Prerna) program launched by the Corporation to imbibe safe work culture and improve well-being of contract workmen, 248 Prerna Programme covering 10743 Contract workmen were conducted during year 2017-18.

OFFICIAL LANGUAGE IMPLEMENTATION

The usages of Hindi is ensured in the business of your Corporation by motivating the employees through persuasion, incentive and harmony and Hindi is being promoted by utilizing various facilities available in the field of Information & Technology. To promote the linguistic and cultural talent of the employees, awareness about Hindi is created in the offices through All India Hindi Mahotsav, Hindi Fortnight, Official Language Conferences, Hindi Competitions and Hindi Workshops etc.

During the year 2017-18, your Corporation was awarded with the highest award, Rajbhasha Keerti Pratham Purskar HPCL also got Rajbhasha Keerti Pratham Purskar for excellent coordination and notable achievements of Town Official Language Implementation Committee (PSUs), Mumbai. Thus, Honâble President of India awarded your Corporation with two highest Purskars on the occasion of Hindi Diwas on 14th September 2017 at Vigyan Bhawan, New Delhi.

Your Corporation is coordinating Town Official Language Implementation Committee of Mumbai based PSUs since 1983 and thereby guiding Mumbai based 64 PSUs in the field of Official Language Implementation. Other than the TOLIC Meetings, we have trained the officials of different PSUs through conducting various programmes such as Team Building, Digital India, IT & Hindi and Innovation in HR.

Your Corporation has been awarded with the Official Language Shield by Ministry of Petroleum and Natural Gas, Government of India, for the last three years. Last year HPCL has made a record in entire Oil Industry by receiving 43 O.L. Awards from Government of India. Besides this, in the technical field, the Corporation has taken new initiative and conducted Technical Hindi Article Competition and Technical Hindi Seminar also for which our efforts were specially appreciated by Ministry of Petroleum and Natural Gas.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation has always believed in being a catalyst of transformation through its CSR endeavors. Your Corporation is committed to delivering happiness by making meaningful changes in the lives of people through its community engagement and holistic societal development. Being a responsible corporate citizen, the constant effort is to maximize positive impact of our initiatives by integrating and internalizing CSR into the core of business operations.

Your Corporation reached out to larger sections of marginalized societies in FY 2017-18 through innovative, value-driven and well-designed CSR projects that brought together collective effort to positively impact the lives of marginalized and less privileged.

National Development Policies, Sustainable Development Goals and flagship schemes of Government of India have been the primary guiding forces behind all our CSR initiatives in the focus areas of Child Care, Education, Health Care, Skill Development, Sports, Environment and Community Development. Your Corporation has always believed in adopting strategies aimed at âBridging the Gapsâ by identifying gaps in the existing system and narrowing them rather than creating new parallel systems.

Your Corporation initiated some ambitious projects this year complementing its efforts to create a healthy, educated and empowered nation.

To work towards promoting Sanitation and Hygiene in government schools, an e-WASH program was initiated which aims to inculcate good hygiene practices among school students as well as local communities. âKashmir Super 30 (Medical)â was set up in collaboration with Indian Army to enthuse a new ray of hope for the underprivileged students of Kashmir and prepare them to compete at the national level to secure admission into medical colleges. Your Corporation spearheaded a first-of-its-kind collaborative project by OMCs to improve facilities at Tulip Garden, Srinagar. Contribution was also made towards Armed Forces Flag Day Fund which is utilized for providing financial assistance to needy Ex-Servicemen, war widows and their dependents. Your Corporation also provided support to enhance the quality of health care services in the field of cancer treatment and diagnosis at Tata Memorial hospital.

Impacting the lives of school-going children by lending support to their educational pursuits has been the aim of our projects Nanhi Kali, Akshayapatra, Unnati and Agastya.

Our projects Dil without Bill, Suraksha and Dhanwantari in the focus area of health care aim to provide preventive and curative health care facilities. As a part of Skill India Mission, Project Swavalamban provides skill training to youth and school dropouts from under-privileged areas in various trades like mechanical, electrical, construction, geriatric care etc. with an aim to enhance their employability.

Your Corporation enthusiastically participated in âSwachh Bharat Abhiyanâ, the flagship movement of Government of India which aims to achieve the vision of âClean Indiaâ by 2019.

With a focus on creation of sanitation infrastructure and awareness generation among masses, your corporation undertook various innovative projects in collaboration with various stakeholders for effective implementation. This included improvement of sanitation facilities at 20 prominent locations in Mumbai, construction of school toilets and community toilets and various other initiatives for improvement of sanitation infrastructure and other facilities.

Your Corporation has adopted Golden Temple under the âSwachh Iconic Placesâ an initiative focused on select heritage, spiritual and cultural places in the country

Your Corporationâs employees at business locations across the length and breadth of the country actively participated in Swachhta Pakhwada and Swachhta Hi Sewa campaigns and took up various innovative activities under Swachh Bharat Abhiyan in collaboration with Municipal Corporations/ District Administration/ Indian Railways.

With an aim to develop entrepreneurial abilities, third phase of Entrepreneurship Development Project was launched for aspiring youth from SC/ST communities in order to equip them with the required skills for transformation from job-seekers to job-creators. Scholarships were also provided to meritorious students from SC, ST, OBC and PWD communities to energize academic talent.

To strengthen the âSkill Indiaâ initiatives of the Government of India, contribution was made for the promotion of higher education and employability skills towards five Skill Development Institutes at Rae Bareilly, Guwahati, Visakhapatnam, Kochi, and Bhubaneshwar and towards the establishment of Indian Institute of Petroleum and Energy

Your Corporation also contributed Rs.25.27 crore towards Pradhan Mantri Ujjwala Yojna (PMUY) which aims to safeguard health of women and children by providing them clean cooking fuel so that they donât have to work in smoky unhealthy kitchens or wander about to collect firewood.

Various other local area development initiatives carried out and driven by sheer passion and altruism of our officers enabled us to reach out to the most unreached section of marginalized societies thus bringing more smiles.

Your Corporationâs CSR endeavors were recognized in the form of awards bestowed at different platforms. Golden Temple-Amritsar, adopted by your Corporation won the âBest Iconic Placeâ award under National Swachh Bharat Awards by the Ministry of Drinking Water and Sanitation. Your Corporation was also conferred with The Golden Peacock Award, PRSI National Awards 2017 - Child Care, PRSI National Awards 2017 -PSU and SKOCH Blue Economy Award for its projects and intervention models which aim to create long term and sustainable impacts.

The details of CSR activities of your Corporation containing details of CSR Committee Members, brief outline of the CSR policy, overview of the CSR initiatives, prescribed expenditure, amount spent etc. forming part of Directorâs report are provided in Annexure III.

CORPORATE GOVERNANCE

Your Corporation continues to adopt the best practices of Corporate Governance to ensure transparency, integrity and accountability in its functioning. The corporate Governance Report highlighting these endeavours has been incorporated as a separate section, forming part of the Annual Report.

PROCUREMENT OF GOODS & SERVICES FROM MSES

In line with the Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012, for the year 2017-18 against the set target of 20%, your Corporation has achieved 31.21% (? 3,011.97 Crores) procurement of goods and services from Micro & Small Enterprises (MSEs).

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

A workshop was conducted for Internal Complaint Committee members across the Corporation in order to help them understand their roles and responsibility. Further, 8 workshops were conducted across several locations to apprise employees of the provisions of the act.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A detailed Management Discussion and Analysis Report forms part of this Annual Report.

FINANCIAL STATEMENTS OF SUBSIDIARIES

In terms of Proviso to Section 136 (1) of the Companies Act, 2013, your Corporation will place separate audited accounts in respect of each of its subsidiary on its website & also provide a copy of separate audited financial statement in respect of each of its subsidiary, to any shareholder of the Company who asks for it. The Financial Statements of the subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies.

COST AUDIT

The Cost Audit for the financial year 2016-17 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs before the stipulated date of filing.

DIRECTORS

Your Corporationâs Board presently comprises of 13 Directors. The Whole Time Directors are Shri Mukesh Kumar Surana (Chairman & Managing Director), Shri Pushp Kumar Joshi (Director -Human Resources), Shri J Ramaswamy (Director- Finance), Shri S Jeyakrishnan (Director - Marketing) and Shri Vinod S Shenoy (Director - Refineries).

Shri J Ramaswamy is also a Chief Financial Officer (CFO) of the Corporation in terms of requirement of Section 203 of the Companies Act, 2013.

The Government Directors are Shri Sandeep Poundrik and Ms. Sushma Taishete. The Part Time Non Official Directors (Independent) are Shri Ram Niwas Jain, Smt. Asifa Khan, Shri G V Krishna, Dr Trilok Nath Singh, Shri Amar Sinha and Shri Siraj Hussain.

As per the provisions of Section 152 of the Companies Act, Shri Pushp Kumar Joshi and Shri S Jeyakrishnan will retire by rotation at the next Annual General Meeting and being eligible, offer themselves for re-appointment.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Appointment:

- Shri Amar Sinha and Shri Siraj Hussain were appointed as Independent Directors on the Board of your Corporation, effective 21.09.2017.

- Ms. Sushma Taishete was appointed as Government Director (Part-Time Ex-Officio) on the Board of your Corporation effective 05.12.2017

Cessationship:

- Smt. Urvashi Sadhwani, Government Director (Part-Time Ex-Officio) has ceased to be Director of your Corporation effective 24.11.2017.

The Board places on record its sincere appreciation for the valuable services rendered by Smt. Urvashi Sadhwani, during her tenure as Director of the Corporation

NUMBER OF MEETINGS OF THE BOARD

During the year 12 (Twelve) Board meetings were convened and held. The details of the Board Meetings are given in Corporate Governance Report.

MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

Your Corporation, being a Govt. Company, is exempted to furnish information under Section 197 of Companies Act, 2013 vide Ministry of Corporate Affairs (MCA) Notification dated 05.06.2015.

There was a reference by C&AG during review of accounts with regards shift allowance being part of 50% of Basic Pay. Corporation has represented on this matter to MOP&NG.

The details regarding the number of women employees vis-a-vis the total number of employees in each group is also given as herein below:

Group	Total No. of	No. of Women	% of Women
	Employees	Employees	Employees
A	6,069	688	11.34
B*	-	-	-
C	3,601	256	7.11
D	682	18	2.64
TOTAL	10,352	962	9.29

*Your Corporation, has no posts classified under group âBâ as the entry in non-management grades has been re-classified in group âCâ effective 1.1.1994.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Your Corporation, being a Government Company, the performance evaluation of the Company is carried out by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MOP&NG) through the process of Memorandum of Understanding in each Financial Year Further there is also performance evaluation of Functional Directors by MOP&NG. Compliance of Section 134(3)(p) are exempted for Government Companies as Performance Evaluation of Directors are carried out by MOP&NG as per its own evaluation methodology.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent directors have given a declaration that they meet the criteria of independence as laid down under Section 149(6) of Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Statement of declaration required under Section 149(6) have been obtained from the Independent Directors.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Corporation being a Government Company, is exempted to furnish information under Section 134(3)(e) of the Companies Act, 2013 vide MCA Notification dated 05.06.2015.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSON AND OTHER EMPLOYEE

AUDIT COMMITTEE

The composition of Audit committee, as required under section 177(8) of the companies Act, 2013 is given as under:

Sl.No.	Name	Category
1.	Shri Ram Niwas Jain	Part-Time Non Official Director
		(Independent) - Chairman
2.	Shri G V Krishna	Part-Time Non Official Director
		(Independent) - Member
3.	Shri J Ramaswamy	Whole Time Director, Member

During the year, there were no such cases observed where the Board had not accepted any recommendation of the Audit Committee.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company has appointed Shri Upendra Shukla, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure IV There is no qualification, reservation or adverse remark made by the Practising Company Secretary in his Secretarial Audit Report.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return is annexed as Annexure V.

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the year 2017-18 are enclosed as Annexure VI.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The details on the performance and financial position of Subsidiary, Associate and Joint Venture Companies are given in Management Discussion & Analysis Report. Further, Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule (5) of the Companies (Accounts) Rules, 2014, the salient features of Financial Statement of Subsidiary and Joint Ventures in Form AOC-1 forms part of the Annual Report separately.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE

Subsidiary and Joint Venture company incorporated during 2017-18:

Subsidiary:

HPCL Middle East FZCO

HPCL Middle East FZCO, a 100% Subsidiary of your Corporation was incorporated on 11th February, 2018 as a Free Zone Company under Dubai Airport Free Zone and Establishment Card was issued on 22nd March, 2018 for the Company. The foreign subsidiary was established for trading in Lubricants & Grease, Petrochemicals and Refined Oil Products.

Joint Ventures:

Ratnagiri Refinery and Petrochemicals Ltd. (RRPCL)

RRPCL was incorporated on 22nd September, 2017 with Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) holding equity in the ratio 50%: 25%: 25% respectively.

Not-for-Profit Company:

Ujjwala Plus Foundation, a joint venture of Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) with fund contribution in the ratio 50%: 25%: 25%, respectively was incorporated on 21st July, 2017 as a not-for-profit Private Company Limited by Guarantee (without Share Capital) under Section 8 of the Companies Act 2013.

Company dissolved during 2017-18:

CREDA-HPCL Biofuel Limited (CHBL)

CHBL, in which HPCL holds 74% of equity shareholding was dissolved with effect from 08th March, 2018.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the Financial Year 2017-18, there is no Order or Direction of any Court or Tribunal or Regulator which either affects your Corporationâs status as a going concern or which substantially or significantly affects your Corporationâs business operations:

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Corporation, being a Government Company is subjected to the CVC Guidelines and the Corporation has a separate Vigilance Department administering the Vigilance matters.

Your Corporation has a Whistle Blower Policy approved by the Board and the same is placed on the website of the Corporation. Weblink of whistle blower policy is stated herein below:

Weblink: https://www.hindustanpetroleum.com/documents/pdf/ Whistle_Blower_policy.pdf

DETAILS OF DEPOSITS

Particulars	Amount (Rs./ Crores)
i) Deposits accepted during the year	NIL
ii) Deposits remaining unpaid or unclaimed as	NIL
at the end of the year
iii) Default in repayment of deposit or payment	NIL
of Interest thereon during the year.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, it is hereby confirmed that:

i. In the preparation of the Annual Accounts, the applicable Accounting standards have been followed along with proper explanation relating to material departures.

ii. The Directors have 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 the profit and loss of the company for that period.

iv. The Directors have prepared the Annual Accounts on a going concern basis.

v. The Directors, have laid down internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively.

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to our valued customers as well as for the overall performance of the Corporation.

Your Directors are thankful to the shareholders for their faith and continued support in the endeavors of the Corporation.

For and on behalf of the Board of Directors

sd/-

Mukesh Kumar Surana

Chairman & Managing Director

Date : 22 nd May, 2018

Mar 31, 2017

DEAR MEMBERS

The behalf of the Board of Directors, it gives me immense pleasure in presenting to you the sixty-fifth Annual Report on the Performance of the Corporation, together with the Audited Financial Statements for the financial year ended March 31, 2017.

HIGHLIGHTS

(Rs. / Crores)

	Consolidated		Standalone
	2016-17	2015-16	2016-17	2015-16
FINANCIAL PERFORMANCE
Sales/Income from Operation	2,13,904.15	1,97,655.81	2,13,488.95	1,97,437.53
Profit before Depreciation, Interest and Tax (PBDIT)	14,583.03	10,304.37	12,091.77	9,083.45
Depreciation & Amortization Expenses	(2,776.37)	(2,846.09)	(2,535.28)	(2,653.21)
Finance Cost	(609.24)	(723.18)	(535.65)	(653.60)
Profit before Tax (PBT)	11,197.42	6,735.10	9,020.84	5,776.64
Tax Expenses	(2,961.60)	(2,060.41)	(2,812.04)	(2,050.48)
Profit after Tax (PAT)	8,235.82	4,674.69	6,208.80	3,726.16
Balance brought forward from previous year	13,498.08	10,421.72	14,740.12	12,621.96
Amount available for Appropriation
Appropriations/Others:
Debenture Redemption Reserve (net)	-	148.17	-	148.17
Dividend	(3,477.70)	(1,456.10)	(3,477.70)	(1,456.10)
Tax on distributed profits	(707.98)	(296.43)	(707.98)	(296.43)
Other Comprehensive Income that will not be reclassified to profit or loss(Net of tax)	(16.78)	(3.62)	(15.49)	(3.64)
Other Appropriations	-	9.65	-	-
Balance carried forward	17,531.44	13,498.08	16,747.75	14,740.12
SHAREHOLDERSâ VALUE (Rs.)
Earnings per Share	81.07	46.02	61.12	36.68
Cash Earnings per Share	116.06	81.39	92.26	70.05
Book Value per Share	207.42	164.03	200.29	176.89

* The Financials for the year 2016-17 and 2015-16 have been prepared under Ind AS

PHYSICAL PERFORMANCE (MMT )	2016-17	2015-16
Market Sales (Including Exports)#	35.22	34.21
Crude Thruput:
Mumbai Refinery	8.51	8.01
Visakh Refinery	9.30	9.22

# Market sales (Including Exports) as per Ind AS is 35.23 MMT for FY 2016-17 and 34.19 MMT for FY 2015-16.

SALES/INCOME FROM OPERATIONS

Your Corporation has achieved Sales/Income from operations of Rs.2,13,488.95 crores in 2016-17 as compared to Rs.1,97,437.53 crores in 2015-16 on standalone basis.

PROFIT

Your Corporation has earned Gross Profit of Rs.12,091.77 crores in 2016-17 as against Rs.9,083.45 crores in 2015-16 and profit after tax of Rs.6,208.80 crores in 2016-17 as compared to Rs.3,726.16 crores in 2015-16 on standalone basis.

DIVIDEND

The Board, in its meeting held on February 13, 2017 declared an interim dividend of Rs.22.50 per share. Further, the Board in its meeting held on March 23, 2017 declared second Interim Dividend of Rs.6.40 per share. The total interim dividend declared is Rs.28.90 Per Share.

The Board of Directors, after taking into account the Financial Results of the Corporation during the year, have recommended dividend of Rs.1.10 per share (2015-16 : Rs.16 per share). The total dividend for the year 2016-17 works out to Rs.30.00 per share as against Rs.34.50 per share for the year 2015-16.

The amount of proposed dividend totaling to Rs.111.75 crores, inclusive of Rs.22.75 crores for Corporate Dividend Tax on distributed profits, shall be dispensed from the profit after tax for the year.

BONUS SHARES

Pursuant to the approval of the Shareholders in its meeting dt. Sept. 08, 2016, your company has issued bonus shares in the ratio of two equity shares of Rs.10/- for one existing equity share of Rs.10/- each in September, 2016.

Further, the Board of Directors in their meeting dated 26^th May, 2017 have recommended the issue of Bonus shares in the ratio of one equity share of Rs.10 /- for two existing equity shares of Rs.10 each.

INTERNAL RESOURCES GENERATION

The Internal Resources generated during the year were Rs.5,534.65 crores as compared to Rs.5,421.69 crores in 2015-16 on standalone basis.

CONTRIBUTION TO EXCHEQUER

Your Corporation has contributed a sum of Rs.65,674.37 crores to the exchequer during the year by way of duties and taxes, as compared to Rs.52,234.73 crores in 2015-16 on standalone basis.

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Corporation has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The performance of the Corporation for the year 2016-17 qualifies for âExcellentâ rating basis self-evaluation.

REFINERY PERFORMANCE

FY 2016-17 was a stellar year for your refineries, which have recorded the best ever crude processing with a combined refining throughput of 17.81 MMT surpassing previous yearâs thruput of 17.23 MMT with a capacity utilization of 113 %. This improvement in performance could be achieved by sustaining the good endeavours viz. sustained equipment reliability, timely shutdown adherence and commendable operational discipline.

Higher crude processing translated into enhanced production of petroleum Products with your refineries recording best ever LPG (840 TMT), MS (3,286 TMT), HSD (6,962 TMT), LOBS (431 TMT) and Bitumen (1,216 TMT) production respectively.

In a continuous effort to upgrade the product quality and for compliance to BS IV specification Motor Spirit (âMSâ) and High Speed Diesel (âHSDâ), necessary modifications in this aspect were completed. Thus, your refineries have successfully switched over complete production of MS and HSD to BS IV specification much in advance of April 2017, the timeline given by MoP&NG.

With Sustained commitment towards environmental protection, your Corporation has always been a frontrunner to implement initiatives for reduction of emissions, Mumbai refinery has successfully ensured mechanical completion of Tail Gas Treating Unit (TGTU) in the Sulphur recovery Train at DHDS, the technology which was offered by M/s Engineers India Limited (EIL). Visakh refinery has successfully commissioned Tail Gas Treating Unit (TGTU) in DHDS SRU III. With this, all the SRUs at Visakh refineries have TGTU facilities.

Continuing its focus towards a safe and secure work environment, both refineries have put in place a robust system to bring in safety awareness amongst personnel in their respective assignments on a regular basis. Both refineries have undertaken safety Management evaluation by external agencies. In this year, Mumbai refinery has achieved best ever safety record since its inception with 18.33 Million Safe Man Hours as of 31st March 2017 i.e. 2092 incident free days since 7/10/2011.

The planned capacity enhancement under Mumbai Refinery Expansion Plan (MREP) to 9.5 MMTPA and Visakh Refinery Modernization Plan (VRMP) to 15 MMTPA has obtained all the necessary statutory clearances during the year. Basic engineering for the package is completed and residual process engineering finalized. Projects team has been working relentlessly to manage space for the projects by site clearance activities through reorientation/removal of old assets. The project includes Bottoms Upgradation and BS VI fuel production in compliance to GOI guidelines for Implementation by 1st April 2020.

Your Corporationâs R&D Centre at Bengaluru was dedicated to the nation by Honâble Minister of State - Independent charge, Ministry of Petroleum & Natural Gas. The facility has worked on number of technologies /products viz. H2 PSA Technology, HPFurnOKare, SprayMax FCC Feed Nozzle, HP-ENOCT, HP-DAK to name a few. During 2016-17, 13 Indian and 13 International Patents have been filed and two key technologies have been developed/ demonstrated on a commercial scale.

The particulars with respect to conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo are detailed in Annexure I.

The particulars relating to control of Pollution and other initiatives by Refineries are listed in Annexure II.

Operating Performance of Refineries (Refinery-wise ):

Parameter	Unit	Mumbai Refinery	Visakh Refinery 1
Crude Thruput	TMT	8,510	9,304
Capacity utilization	%	113	112
Distillate yield	%	77.7	74.0
Fuel & Loss	%	7.2	7.3
Specific Energy Consumption*	MBTU/BBL/ NRGF	87.9	78.9
Gross Refinery Margin	$/Bbl	6.95	5.51

* Specific Energy Consumption for the year is as per CHT New MBN method MARKETING PERFORMANCE

The year 2016-17 saw your Corporation benefiting from the strategic plans implemented across different business verticals, which include several meticulously executed customer-centric initiatives at its Retail, LPG, Institutional, Government, Aviation, Lubes, Gas and Renewables marketing streams.

Your Corporation has reinforced its winning streak, by recording a best ever physical performance during 2016-17, by achieving a sales volume of 35.22 Million Tonnes (including exports), compared to sales of 34.21 Million Tonnes during the previous year 2015-16. In the Domestic sales segment, your Corporation recorded a growth of 2.5% over previous year volume. Amongst public sector oil companies, your Corporation has increased its market share by 0.16%, to reach a market share of 23.63% (excluding Petcoke/ LNG) as on 31st March, 2017.

In the mainstay Motor-Fuel segment, your Corporation has achieved a sales volume of 22.78 Million Tonnes and increased its market share in MS and HSD (combined) by 0.08%. Strategic expansion of its network saw the commissioning of 624 new retail outlets during 2016-17, which include 209 retail outlets positioned to cater to customers in rural areas. The network reach has further spread and deepened across markets, with the retail outlet strength rising to 14,412 by the year end.

Your Corporation has also significantly improved its market share in other key customer segments i.e., Diesel (Retail & Direct Consumers), LSHS, Bitumen, Lubricants, Aviation Fuel & LPG, which have contributed to its top line and bottom line.

Domestic LPG marketing is a vital part of your Corporation, and unremitting focus has been given to maintaining excellence in all customer service areas, across India. A significant addition to the customer base has made through the noble Pradhan Mantri Ujwala Yojana (PMUY), by which your Corporation has strived to reach the benefit of this user friendly fuel to persons at the bottom of the pyramid.

An enrolment of 87.07 Lakhs new LPG Gas (Domestic) customers has been completed during the year, which includes 53.85 Lakhs customers enrolled under PMUY during 2016-17. Your Corporationâs domestic LPG customer base now stands at a robust 612 Lakhs, wherein the domestic fuel quantity supplied during the financial year 2016-17 stands at 4.89 Million Tonnes. Another path breaking initiative piloted by the government is the â#GiveItUpâ campaign, by which more than 30 Lakhs consumers of domestic LPG have been motivated give up LPG Subsidy, which has helped in a significant way to promote the PMUY programme.

In the Aviation Business Line, your Corporation achieved a sales volume of 691 TMT and increased its market share by 0.34% amongst PSU companies, and is now supplying Jet Fuel to all the ten scheduled domestic airlines of the country.

Your Corporation has maintained its pole position in the significantly profitable Lubricants business segment in the Indian market, in which players from the MNC segment, private sector and public sector are very active. Your Corporation has created a new sales benchmark with an all-time high total Lubes sales of 607 TMT during the year, by which it has retained its No. 1 position for the fourth year in succession.

Your Corporation continued to focus on enhancing the efficiency and reliability in operations of the O&D assets, which has helped to register the highest ever throughput of 47 MMT through its POL installations. Simultaneously, your Corporation has also achieved an all-time high pipeline thruput of 17.9 MMT during the year, which commensurately aided in minimizing the product placement costs.

Your Corporation has always considered supply and distribution infrastructure to be the essential corner-stone which determines the success of its long term business development plans. Close monitoring of infrastructure development projects during the Financial Year 2016-17 has led to creation of facilities at important greenfield locations and significant enhancement of capacity and handling capabilities at existing brownfield supply locations across the country. Thrust on strengthening infrastructure saw the commissioning of a new LPG Bottling Plant at Bhopal in the State of Madhya Pradesh and commissioning of Mangalore Hasan Solur Mysore LPG Pipeline (MHSMLPG) in Karnataka State.

Your Corporation has played well its role as a conscientious corporate citizen in two other important government led initiatives i.e., Swachh Bharat Abhiyan (SBA) and thrust towards Digital Payments vis-a-vis cash based transactions.

In support of SBA, 89 Toilet blocks were constructed in villages and schools, for the benefit of people in the vicinity of our supply locations. Retail Outlets located on the countryâs Highway being an important touchpoint for the traveling public, exclusive toilet facility for Ladies at 330 Retail Outlets has been developed during the year, supplementing the existing Gents toilets at these locations.

At your Corporation, 99.8% of the payment receipts, from institutional customers, dealers and other business associates, is through digital i.e., electronic payment routes. The Retail Outlet and LPG Distributor networks of your Corporation played a vital role during the de-monetisation, as one of the points authorized by the government to accept high denomination notes, thereby creating substantial goodwill amongst the citizens served by them. Hand in hand with the above, your Corporationâs Retail and LPG network also single-mindedly strived to motivate customers to adopt digital payments as a way of life e.g., Bank Debit Cards payment with ânilâ bank charges, Mobile wallet payment etc.

Many of the products handled being intrinsically vulnerable from fire safety standpoint, your Corporation has exercised the maximum care throughout the logistics chain. Constant vigilance in this regard has enabled your Corporation to practically eliminate serious incidents across the supply network, during the year.

Your Corporation vigilantly monitors the emerging trends in the market place, as well as the continuously evolving customer preferences. These are continuously analysed for developing and implementing strategic initiatives, repositioning of its products and services as per the evolving market needs along with a sustained effort to make the best use of technology to engage customers in innovative and impactful ways.

A detailed discussion of the performance of the Marketing function is given in the Management Discussion & Analysis.

TREASURY MANAGEMENT

During the year the company has repaid Long Term External commercial borrowings (ECB) of USD 1000 million (Rs.6,813 crores). Your Corporation effectively used a variety of borrowing instruments to optimize its cost of borrowings. The short term borrowing requirements was met through Collateralized Borrowing and Lending Obligations (CBLO), Commercial Papers (CP), MIBOR Linked Loan, USD Revolving Line of Credit (RLC) and Cash Credit facility from consortium banks. Effective Treasury management and timely hedging of LIBOR interest rate risk resulted in reduction in interest cost of the Corporation from Rs.654 crores during FY 2015-16 to Rs.536 crores during FY 2016-17.

Temporary surplus of funds were invested at best rates deriving substantial income on such investment. These funds were invested in term deposit with public sector banks, debt schemes of public sector mutual funds and Treasury Bills. The income from temporary surplus funds was increased from Rs.51 crores in financial year 2015-16 to Rs.126 crores in financial year 2016-17.

Your Corporation was able to retain long term issuer rating of âBaa3â with positive outlook from M/s. Moodyâs Investors Services and BBB- rating from Fitch Ratings with âstableâ outlook. Both ratings are at par with sovereign rating.

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate Internal Financial Controls for ensuring the orderly and efficient conduct of its business, including adherence to the Corporationâs 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 information, which is commensurate with the operation of the Corporation. As part of this exercise, the design of internal controls, and its operating effectiveness, for the key business processes is tested by independent experts. Based on the review carried out, independent experts have confirmed that they are satisfied with the effectiveness and adequacy of Internal Controls over Financial Reporting. The entire activity of review and assessment of Internal Controls is carried out under the guidance of a Core Committee set-up for this purpose.

RISK MANAGEMENT POLICY

Your Corporation has adopted a well-defined process for managing its risks on an ongoing basis and for conducting the business in a risk conscious manner. These self-regulatory processes and procedures are contained in our Risk Management Charter and Policy, 2007. The Corporation has a structured and comprehensive Risk Management Framework, under which the risks are identified, assessed, monitored and reported, as a part of a normal business practice. Your Corporation has leveraged technology to seamlessly integrate and automate the entire process of risk monitoring and reporting which also facilitate company-wide process of managing the risks. Our risk management system is fully aligned with the corporate and operational objectives.

The Corporation has engaged the services of an independent expert to assist in continued implementation of effective Risk Management Framework. In that direction, Risk Management Steering Committee (RMSC) continues to provide its guidance. Your Corporation has put in place mechanism to inform Board Members about the risk management and minimisation procedures, and periodical review to ensure that executive management controls risks by means of a properly defined framework.

VIGILANCE

The vigilance function of your Corporation, in addition to its regular duties, has regularly interacted with other functions for promoting awareness amongst users about the proper method for achieving set objectives while complying with system and procedure guidelines and other rules of your Corporation.

During the year, based on the theme of Public Participation in promoting integrity and Eradicating Corruption, a campaign was launched for administering E-Integrity Pledge. More than 12,000 E-Integrity pledges were taken by employees and other stakeholders like vendors, dealers etc.

Interactions with employees including new recruits and other stakeholders were held. Also surprise inspections were carried out. Co-ordination with agencies like CBI, CVC, Vigilance wing of MOP&NG etc. was done apart from carrying out investigation of complaints received from offices of MOP&NG, CVC, CBI and other sources.

Review of operating areas for such as Terminal Automation system, activities of R&D centres, Outlet Diagnostic and Monitoring Tool etc. for system improvement was also carried out during the year.

INDUSTRIAL RELATIONS

As a result of proactive approach, Industrial Relations remained also harmonious across the Corporation. It is worth mentioning that not only there was no loss of productivity due to IR issues, the year also witnessed productivity increase across locations which amply demonstrates the maturity of our Unions and commitment of employees. Various Settlements were signed with the Unions in the areas of Productivity Enhancement, Redeployment etc. which is the outcome of Trust and the healthy IR climate in your Corporation.

The Corporation took proactive steps to ensure that all our contract workmen were covered under Pradhan Mantri Jan Dhan Yojana and Prime Minister Suraksha Bima Yojana. To promote Digital India and cashless economy, it was ensured that all Contract Labour deployed across your Corporation are paid their wages through National Electronic Fund Transfer (âNEFTâ). Further, various programs across your Corporation were organized for Contract workmen so that they can use various modes of cashless payments.

At your Corporation, we believe that safety and wellbeing of all stake holders including Contract Workmen is of paramount importance. Under the ( âPrernaâ ) program launched by the Corporation to imbibe safe work culture and improve well-being of contract workmen, 109 âPrernaâ Programs covering 5,153 Contract workmen were conducted during year 2016-17.

This year also your Corporation has been conferred with the prestigious âGlobal HR Excellence Awardâ for âOrganization with Best Employee Relation Practicesâ at a ceremony held during the 25th edition of World HRD Congress on February 15, 2017 at Mumbai.

OFFICIAL LANGUAGE IMPLEMENTATION

Your Corporation gives significant importance towards implementation of Official Language. Keeping in mind the harmony, encouragement and motivation, necessary compliance of constitutional provisions pertaining to Official Language is ensured by using hindi as business language. By using Modern technology use of Hindi is ensured in the field of Information Technology.

Through MOP&NG OL Conference, All India Hindi Mahotsav, Official Language Conferences, competitions and Hindi workshops your Corporation creates awareness among its employees for progressive use of Hindi. Your Corporation has headed Mumbai (PSU) Town Official Language Implementation Committee since 1983 and has been awarded by Official Language Dept. GOI and has been appreciated by Secretary-OL, MHA, GOI. Thus, your Corporation also provides guidance to the other Public Sector Undertakings for OL Implementation.

Your Corporation has bagged 37 awards in Official Language Implementation, including Petroleum and Natural Gas OL Shield for last two consecutive years thus maintaining a lead position in the entire Oil Industry for which special appreciation has been received from the Ministry of Petroleum & Natural Gas.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation has taken a leap forward this year in direction of achieving its corporate vision by meeting its social commitment through taking steps beyond the mandates of various statutes and guidelines. Continuing with efforts to create a heathy, educated and empowered nation, your Corporation has spent its CSR Budget in the areas of Child Care, Education, Health Care, Sports, Skill Development, Environment and Community Development. Your Corporation believes in creating social capital for the community as well as business through its CSR efforts to accelerate social development.

Your corporation collaborated and undertook innovative CSR projects in the year 2016-17 that brought together collective efforts to positively impact the quality of life of those who are marginalized and less privileged. The focused efforts of your Corporation towards social development through creation of community infrastructure and social intervention has led to empowerment and socio-economic welfare of the host communities.

Your Corporation is constantly adding value to the sustainable solutions to societal problems and all the CSR activities of the Corporation has remained aligned with National Developmental Policies & Programs and has followed the standards of Global Developmental Practices. The projects and intervention models have been able to make sustained and long term impacts on the society. Your Corporation has adopted the strategy of âBridging the Gapsâ by identifying gaps in the existing system and narrowing them rather than creating new parallel systems.

As a conscientious Corporate citizen, recognizing the need of Child Care, a model of inclusivity and equal opportunity was created by your Corporation under project ADAPT. Through therapies, special education and skill development, the project makes special children independent and also sensitizes the stakeholders at large to accept them as equal members of society.

Your Corporationâs CSR Projects are in sync with Governmentâs focus on education and girl child. Project âNanhi Kaliâ contributes to education of girl child and women empowerment through proper academic, material and social support. This results in reducing the school dropout and holistic development of girl child.

Project âAkshayapatraâ supplements the efforts of Government Mid-Day Meal Scheme resulting in reduction in mal-nutrition and improved school attendance.

Project âUnnatiâ aims to support the Digital India initiative, by spreading computer literacy among the school children from under privileged communities in semi urban and rural areas.

Project âAgastyaâ ignites the curious minds of the school children by fueling scientific temper at the young age. The mobile science labs provide the infrastructure and learning opportunities for the same.

As a part of focus on health care, amongst other projects our project âDil without Billâ offers free heart surgeries for patients belonging to economically weaker section. Beneficiaries are identified through medical camps in different parts of the country.

17 Mobile Medical Vans under Project âDhanwantariâ provides free basic health care facilities in the âlast mile connectâ to the remotest parts of the country and urban slums. This is achieved by providing facilities at the doorsteps of the community.

Long Distance Truck drivers are the most vulnerable in our supply chain. To address their sensitive issues of STIs and HIV/AIDS, Project Suraksha reaches out to them by offering free medical consultation, counselling and other outreach services through âKhushi Clinicsâ at our retail outlets on Highways.

Your Corporation has been at the forefront of Skill India Mission and has been providing skill training to youth from under privileged areas. Project âSwavalambanâ trains school dropouts in various skill trades like automobile, hospitality, welding, driving, construction etc. enhancing their employability. The project also covers difficult geographical areas which includes naxal affected areas and conflict areas of J&K.

Your Corporation is establishing Indian Institute of Petroleum and Energy, Visakhapatnam and has also contributed to the Skill Development Institutes at Visakhapatnam and Kochi. These initiatives will result in promoting higher education and employability skills.

To address the needs of the host communities, number of development programs were implemented to reach out to the last mile of population. Programs like development of Rain shed bio-industrial areas, organic farming, farmers cooperatives and self-help groups etc. were executed through community participation.

Your Corporation has enthusiastically participated in âSwachh Bharat Abhiyanâ by engaging all its stakeholders including employees and citizens alike. Corporation focused on creation of infrastructure for sanitation and awareness among masses. Beneficiaries of CSR Projects also actively participated in the Abhiyan. Your Corporation also collaborated with Municipal Corporations and Panchayats in various states for achieving the objectives of Swachh Bharat Abhiyan.

Supporting the goals of Make in India and Stand Up India, we have a unique Entrepreneurship Development Project for aspiring youth from SC and ST Communities. This program trains entrepreneurs on all round aspects of a startup.

To energize the academic talent among meritorious students from SC, ST, OBC and PWD Communities, scholarships worth Rs.6.03 Crores were distributed to 10,932 school and college students.

Your Corporation was the proud winner of the Platts Global Energy Award-2016 for Corporate Social Responsibility and gained recognition at the international level. The judges acknowledged the work of Your Corporation by saying that ânobody.. and we mean nobody does CSR better than your Corporationâ.

Your Corporation has endeavoured to ensure the maximum impact, from the well planned initiatives undertaken during the year, with the expenditure being commensurate with the mandatory average net profit of the company for last three financial years.

The details of CSR activities of your Corporation containing details of CSR Committee Members, brief outline of the CSR policy, overview of the CSR initiatives, web link of CSR Policy, projects and Programmes, prescribed expenditure, amount spent etc., forming part of Directorâs report are provided in Annexure III

CORPORATE GOVERNANCE

PROCUREMENT OF GOODS & SERVICES FROM MSES

In line with the Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012, for the year 2016-17, against the set target of 20 %, your Corporation has achieved 33.72% (Rs.2,519 Crores) procurement of goods and services from Micro & Small Enterprises (MSEs).

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Corporationâs emphasis is to provide a Safe Workplace for its employees. During the year ending 31.03.2017, neither any complaint of sexual harassment had been filed nor any complaint pending for enquiry. Further, your Corporation has conducted one workshop for the members of Internal Complaint Committee formed as per the provision of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, Redressal ) Act, 2013 at Hyderabad.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A detailed Management Discussion and Analysis Report forms part of this Annual Report.

FINANCIAL STATEMENTS OF SUBSIDIARIES

In terms of Proviso to Section 136 (1) of the Companies Act, 2013, the Company will place separate audited accounts in respect of each of its subsidiary on its website & also provide a copy of separate audited financial statement in respect of each of its subsidiary, to any shareholder of the company who asks for it. The Financial Statements of the subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013 a separate statement containing salient features of the Financial Statement of Subsidiary/Associate/Joint Venture Companies in Form AOC-1 is attached along with Financial Statements.

COST AUDIT

The Cost Audit for the financial year 2015-16 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs before the stipulated date of filing.

DIRECTORS

Your Corporationâs Board presently comprises of 11 Directors. The Whole Time Directors are Shri Mukesh Kumar Surana (Chairman & Managing Director), Shri Pushp Kumar Joshi (Director - Human Resources), Shri J. Ramaswamy (Director- Finance), Shri S. Jeyakrishnan (Director - Marketing) and Shri Vinod S. Shenoy (Director - Refineries).

Shri J Ramaswamy is also the Chief Financial Officer (CFO) of the Corporation in terms of requirement of Section 203 of the Companies Act, 2013.

The Government Directors are Ms. Urvashi Sadhwani and Shri Sandeep Poundrik. The Part Time Non Official Directors (Independent) are Shri Ram Niwas Jain, Smt. Asifa Khan, Shri G.V. Krishna and Dr. Trilok Nath Singh.

As per the provisions of Section 152 of the Companies Act, Shri Sandeep Poundrik and J. Ramaswamy retire by rotation at the next Annual General Meeting and being eligible offer themselves for re-appointment.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Appointment:

- Shri S. Jeyakrishnan, Director Marketing (Whole Time Director) & Shri Vinod S. Shenoy , Director Refineries (Whole Time Director) were appointed as Additional Directors on the Board of your Corporation, effective 01.11.2016.

- Smt.Asifa Khan and Shri G.V. Krishna were appointed as Non-Official Independent Directors on the Board of your Corporation, effective 13.02.2017.

- Dr. Trilok Nath Singh was appointed as Non-Official Independent Director on the Board of your Corporation effective 20.03.2017. Cessationship:

- Shri B. K. Namdeo, Director Refineries (Whole Time Director) and Shri Y.K. Gawali, Director Marketing (Whole Time Director) have ceased to be Directors of the Corporation effective 31.10.2016 on attaining the age of superannuation.

The Board places on record its sincere appreciation for the valuable services rendered by the above Directors during their tenure as Directors of the Corporation.

NUMBER OF MEETINGS OF THE BOARD

During the year 10 (Ten) Board meetings were convened and held. The details of the Board Meetings are given in Corporate Governance Report.

MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

Your Corporation, being a Govt. Company, is exempted to furnish information under Section 197 of companies Act, 2013 vide Ministry of Corporate Affairs (MCA) Notification dated 05/06/2015.

There was a reference by C&AG with regard to the requirement of shift allowance being part of allowances within the ceiling of 50% of Basic pay. Corporation has represented on this matter to MOP&NG.

The details regarding the number of women employees vis-a-vis the total number of employees in each group is also given as herein below:

Group	Total No. of	No. of Women	% of Women
	Employees	Employees	Employees
A	5,858	610	10.41
B¹	-	-	-
C	3,796	289	7.61
D	768	20	2.60
TOTAL	10,422	919	8.82

Your Corporation, has no posts classified under group âBâ as the entry in non-management grades has been re-classified in group âCâ effective 1.1.1994.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Your Corporation, being a Government Company, the Performance Evaluation of the Company is carried by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MOP&NG) through the process of Memorandum of Understanding in each Financial Year. Further there is also performance evaluation of Functional Directors by MOP&NG. As per MCA Notification dated 5^th June, 2015, Compliance of Section 134 (3) (p) are exempted for Government Companies as Performance Evaluation of Directors are carried out by the MOP&NG as per its own evaluation methodology.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent directors have given a declaration that they meet the criteria of independence as laid down under Section 149(6) of Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Statement of declaration required under Section 149(6) have been obtained from the Independent Directors.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Corporation being a Government Company, is exempted to furnish information under Section 134 (3) (e) of the Companies Act, 2013 vide MCA Notification dated 05.06.2015.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSON AND OTHER EMPLOYEE

Your Corporation, being a Central Public Sector Enterprise, the remuneration payable to Key Managerial Persons and other employees are fixed by the Government of India. However, payment like Performance Related Pay is placed for the approval of Nomination and Remuneration Committee.

AUDIT COMMITTEE

The composition of Audit committee, as required under section 177(8) of the companies Act, 2013 is given as under:

Sl. No.	Name	Category
1.	Shri Ram Niwas Jain	Part-Time Non Official Director ( Independent) -Chairman
2.	Shri G V Krishna	Part-Time Non Official Director ( Independent) -Member
3.	Shri J. Ramaswamy	Whole Time Director, Member

During the year, there were no such cases observed where the Board had not accepted any recommendation of the Audit Committee.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company has appointed Shri Upendra Shukla, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure IV. There is no qualification, reservation or adverse remark made by the Practising Company Secretary in his Secretarial Audit Report.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return is annexed as Annexure V.

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the year 2016-17 are enclosed as Annexure VI.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The details on the performance and financial position of Subsidiary, Associate and Joint Venture Companies are given in Management Discussion & Analysis Report Further, Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule (5) of the Companies (Accounts) Rules, 2014, the salient features of Financial Statement of Subsidiary and Joint Ventures in Form AOC-1 forms part of the Annual Report separately.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE

Godavari Gas Private Limited (GGPL) was incorporated on 27th September 2016 with your Corporation holding 26% equity stake and balance 74% being held by Andhra Pradesh Gas Distribution Corporation Limited (APGDC).

No company have ceased to be subsidiary, joint venture or associate of your Corporation during 2016-17.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the Financial Year 2016-17 there is no Order or Direction of any Court or Tribunal or Regulator which either affects your Corporationâs status as a going concern or which substantially or significantly affects your Corporationâs business operations:

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Corporation, being a Government Company is subjected to the CVC Guidelines and the Corporation has a separate Vigilance Department administering the Vigilance matters.

Your Corporation has a Whistle Blower Policy approved by the Board and the same is placed on the website of the Corporation. Weblink of whistle blower policy is stated herein below:- Weblink: https://www.hindustanpetroleum.com/documents/pdf/Whistle_Blower_policy.pdf

DETAILS OF DEPOSITS

Particulars	Amount (Rs./ crores )
i) Deposits accepted during the year	NIL
ii) Deposits remaining unpaid or unclaimed as at the end of the year	NIL
iii) Default in repayment of deposit or payment of Interest thereon during the year.	NIL

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, it is hereby confirmed that:

i. In the preparation of the Annual Accounts, the applicable Accounting standards have been followed along with proper explanation relating to material departures.

ii. The Directors have 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 the profit and loss of the company for that period.

iv. The Directors have prepared the Annual Accounts on a going concern basis.

v. The Directors, have laid down Internal Financial Controls to be followed by the company and that such Internal Financial Controls are adequate and are operating effectively.

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors are thankful to the shareholders for their faith and continued support in the endeavors of the Corporation.

Date : 26^th May, 2017 For and on behalf of the Board of Directors

Sd/-

MUKESH KUMAR SURANA

Chairman & Managing Director

Mar 31, 2016

DIVIDEND

The Board, in its meeting held on February 01, 2016 declared an interim dividend of Rs, 11.50 per share. Further, the Board in its meeting held on March 11, 2016 declared second Interim Dividend of Rs, 7.00 per share. The total interim dividend declared is Rs, 18.50 Per Share

The Board of Directors, after taking into account the Financial Results of the Corporation during the year, have recommended a final dividend of Rs, 16.00 per share. The total dividend for the year 2015-16 works out to Rs, 34.50 per share as against Rs, 24.50 per share for the year 2014-15.

The amount of dividend totalling to Rs, 1,406.09 crores, inclusive of Rs, 237.83 crores for Corporate Dividend Tax on distributed profits, shall be dispensed from profit after tax for the year.

INTERNAL RESOURCES GENERATION

The Internal Resources generated during the year wereRs, 5,830.28 crores as compared toRs, 3,901.05 crores in 2014-15 on standalone basis.

CONTRIBUTION TO EXCHEQUER

Your Corporation has contributed a sum of Rs, 52,234.73 crores to the exchequer during the year by way of duties and taxes, as compared to Rs, 40,752.42 crores in 2014-15 on standalone basis

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Corporation has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The performance of the Corporation of the year 2015-16 qualifies for "Excellent" rating basis self-evaluation

REFINERY PERFORMANCE

During the year 2015-16, Your refineries have recorded the best ever crude processing with a combined refining throughput of 17.23 MMT ( 16.18 MMT in 2014-15) and capacity utilization of 116 %. This high performance could be achieved by optimal crude mix, better equipment reliability, timely shutdown adherence and commendable operational discipline

The Overall MoU Rating for Your refineries for Physical parameters like Crude thruput, Distillate yields, Energy Intensity Index stands at "Excellent" level Basic raw material for the refineries is crude oil which constitutes more than 90% of the expenses. Optimum crude mix therefore plays a vital role in refinery profitability. Major challenge before refineries is availability of right crude mix at right price as crude oil market is predominantly seller driven. This demands continuous rebalancing of crude procurement dynamics. Sustained coordination by the corporation resulted in higher allocation of desirable grades from NOC. Quote validity period was reduced in spot tender to bring in more competitiveness. HPCL is the first Indian Oil PSU to procure crude via STS (Ship to Ship Transfer). The aforesaid efforts could enable the corporation register the highest GRM amongst public sector oil marketing companies Higher crude processing translated into enhanced production of Petroleum Products with your refineries recording best ever LPG,MS, HSD, LOBS and Bitumen production of 825,3032, 6470, 423 and 1195 TMT respectively.

In a continuous effort to upgrade the product quality, Mumbai refinery has successfully carried out revamp of existing DHDS and implemented the IsoTherming technology, which is first of its kind in the country. With existing DHTand DIU units, Mumbai refinery is equipped for complete conversion of HSD to BS IV specification which is well before the schedule of roadmap for BS IV fuel specification by April 2017. This project has also resulted in enhanced capacity, improvement in energy efficiency along with more stringent product quality of HSD in the future As is evident, energy costs contribute to the major chunk of the operating costs to the refineries. Therefore, sustained efforts were made to reduce purchase power costs and in that direction Mumbai refinery has purchased power by open access through group captive mode thereby reducing the cost of purchased power and consequently brought down the overall refinery Opex. Mumba refinery is the first amongst PSU refineries to implement the scheme sourcing 20 MW power and upon smooth functioning it is planned to increase it further during the coming year.

Hydrogen management is the most essential for manufacture of better quality petroleum products especially in the light of recent demand for superior specifications of MS & HSD. Accordingly, Pressure Swing Adsorption (PSA) facility for hydrogen purification from CCR Net gases was commissioned at Visakh refinery during the period. PSA technology is offered by few licensors and technology adopted by the facility was jointly developed by Corporate R&D and M/s GENS Korea. With the availability of pure Hydrogen from CCR, the load on hydrogen generation units has reduced considerably resulting in improved energy efficiency and reduction in Opex.

Crude oil is an essential commodity and thus the government has taken steps to envision a strategic cavern storage for emergencies by setting up Indian Strategic Petroleum Reserve Ltd (ISPRL). The strategic crude cavern storage are being set up at three locations Viz. Visakhapatnam, Padur and Mangalore with over 5 MMT storage capacity. The facility at Vishakhapatnam has a storage capacity of 1.33 MMTPA made in two compartments, Cavern A has 1.03 MMT capacity meant for ISPRL and Cavern B of 0.3 MMT capacity allotted for HPCL. Visakh refinery and ISPRL had jointly commissioned both Cavern A and B of Crude cavern facility. The first parcel received was Bonga crude oil in cavern B and subsequently the facility is being utilized for regular refinery operations. This has brought flexibility in optimizing refinery tank farm for storing and processing different crudes at reduced landed costs.

Extending the commitment towards environmental protection, your refineries have always been a forerunner to implement initiatives for reduction of emissions, Visakh refinery has successfully commissioned Tail Gas Treating Unit (TGTU) in the Sulphur recovery Trains at DHDS thus achieving 99.9 % Sulphur recovery. The facility was adopted indigenous Tail Gas Treating (TGT) technology offered by M/s Engineers India Limited (EIL). Mumbai refinery has commissioned Flue gas scrubber unit (FGSU) at Old FCCU for reduction of SOx emissions and Suspended Particulate Matter. These initiatives have reduced the S02 emission substantially thus contributing to much lower emissions than the stipulated emission norms.

Your Corporation continues to leverage workplace Health, Safety & Environment as an integral part of its business policies. Refineries believe occupational and personal health of all employees at all manufacturing sites as well as at its offices is vital for excellence in overall performance. Managing health and safety of the people who work for us, both directly and indirectly, continued to be our highest priority with special focus to enhance safety culture, contractor safety management, risk assessment and training. Thus Mumbai refinery has achieved best ever safety record since its inception with 15 Million Safe Man Hours as of 25th March 2016 i.e. 1721 incident free days since 7/10/2011 Your Corporation has a market share way ahead of refining capacity. With an aim to minimize this gap, both the refineries have planned for capacity enhancement - Mumbai Refinery to 9.5 MMTPA and Visakh Refinery to 15 MMTPA. To keep pace with globa standards, a number of high complexity secondary processing units including bottom up gradation and fuel quality improvement facilities have also been planned. Managing space for the project within existing facilities has been a major challenge which is well addressed by intensive site clearance activities through reorientation/removal of old assets. This will facilitate to commence the project field activities immediately after Board approval/ Environmental clearance Your Corporation is committed to cleaner auto fuel missive of Government of India in rolling out BS-IV compliant Diesel (HSD) and Petrol (MS) from April 1, 2017. Necessary modifications in Visakh refinery in this aspect would be completed way ahead of stipulated date. Mumbai refinery has already inducted necessary infrastructural changes and is capable of total BS-IV conversion now itself. As regard to compliance with BS-VI standards which is scheduled for rolling out effective April 1, 2020, both the refineries have firmed up action plans through revamp of existing units. Licensors selection for these units have already been completed and process design activities are now in progress Your Corporate R&D Centre has shown their exemplary performance by developing and demonstrating commercially a number of process/product technologies in multifaceted areas covering Hydrogen purification from CCR off Gas, Caffeinate yield improvement, Catalytic Visbreaking, Effluent treatment, Decaling of furnace tubes, Pressure drop reduction in hydro processing reactors and Processing of heavy feed stocks in DHDS & FCC

The particulars with respect to conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo are detailed in AnnexureI

The particulars relating to control of Pollution and other initiatives by Refineries are listed in Annexure II

Operating Performance of Refineries (Refinery-wise ):

Crude Thruput TMT 8,013 9,219

Capacity utilization % 123.3 111.1

Distillate yield % 76.0 75.7

Fuel & Loss % 7.83 7.66

Specific Energy Consumption* MBTU/BBL/NRGF - 90.46 82.80

Gross Refinery Margin $/Bbl 8.09 5.46 * Specific Energy Consumption for the year is as per CHT New MBN method

MARKETING PERFORMANCE

The year 2015-16 saw Your Corporation seamlessly executing its strategic plans in different business lines, initiating several customer centric programs and aggressively pursuing its infrastructure development plans resulting in an impressive all-round performance

Your Corporation continued its winning streak by recording its best ever physical performance during 2015-16, achieving sales volume (including exports) of 34.2 million tonnes compared to sales of 31.95 million tonnes during 2014-15. In the Domestic sales segment, your corporation recorded a growth of 9.3% over previous year volume and amongst public sector oil companies increased market share by 0.31 % to reach a market share of 21.25% as on 31st March, 2016

The Industry saw major growth in products of Motor Spirit, LPG, Fuel Oil, Bitumen and Lubricants. Your Corporation not only recorded Industry leading growth in these product lines but has also grown significantly in products of Consumer Diesel, Naptha, Aviation Fuel and the New Business line of RLNG, which helped your corporation achieve a growth above Industry.

In the motor fuel segment, your Corporation achieved a sales volume of 22.74 Million Tonnes and increased its market share in MS and HSD (combined) by 0.37%. The focus on strategic network expansion saw commissioning of a total 590 new retail outlets during 2015-16, which include 185 retail outlets to cater to customers in rural areas, thus further extended our reach and touch points with customers in retail segment to a total of 13,802 Retail Outlets.

Your Corporation has particularly focussed on providing citizen friendly services to customers of domestic LPG and also engaged them on different accounts through increased coverage across the country, while pursuing some path breaking initiatives like PAHAL (DBTL), e- Sahaj etc. initiated by Govt, of India. We have further expanded coverage of citizens with environment supportive domestic LPG to meet their fuelling needs at home for cooking etc. through enrolment of 50.82 Lakhs new LPG Gas (Domestic) customers during FY 15-16. Accordingly, we now touch the lives of 524 lakhs of our citizens by meeting their fuelling needs at home through supplies of domestic LPG totalling to 5.07 million tonnes during the financial year ended 31st March, 2016

More than 27.17 Lakhs consumers of domestic LPG have been inspired to play their part in the cause of nation building and encouraged to give up LPG Subsidy by subscribing to "#GiveltUp" campaign by Govt, of India. Our focussed attention to increase the reach of environment supportive Domestic LPG has resulted in 13.38 Lakhs BPL families receiving the benefits envisaged as part of ''Give back scheme'' as of March 31 st, 2016

Your corporation continues to be the leading player in a crucial segment of our business which is not only very competitive but contributes significantly towards our profitability i.e. marketing of lubricants. Your corporation has created a new benchmark of performance in this very important line of business which has a significant bearing on profitability with a record total Lubes sales of 536 TMT during the year, and thus retained its No. 1 position as a marketer of lubricants in our country for a third year in succession In the Aviation Business Line, your Corporation achieved a sales volume of 609 TMT and increased its market share by 1.3% amongst PSU companies and is now supplying Jet Fuel to all the ten scheduled domestic airlines of the country.

Your corporation has also explored new business portfolios for a sustainable performance on long term basis and accordingly we have taken very considered approach to bring our focus a new line of business for us i.e. marketing of RLNG and also achieved a reasonable sales of 36.2 TMT through our initial efforts and operations in this segment during 2015-16 Our focus on efficiency and reliability in operations of our O&D infrastructure has helped us in delivering the highest ever throughput of 47.60 MMT through POL installations. Simultaneously we have also achieved an all-time high pipeline throughput of 17.61 MMT during the year.

Your corporation continues to capture the emerging trends in the market place as well as continuously evolving preferences at customers'' end and continues to address them by repositioning itself and incorporation of various strategic initiatives and effective application of technology to engage customers in several innovative ways.

A detailed discussion of the performance of the Marketing function is given in the Management Discussion & Analysis.

TREASURY MANAGEMENT

During the year 2015-16, the Corporation was able to bring down interest from Rs, 707 crores to Rs, 640 crores because of efficient treasury management. The Corporation was able to meet its day-to-day short term requirement of funds through mix of short term instruments like Commercial Papers, Collateralised Borrowing and Lending Obligations and Revolving Line of Credit in USD. The Corporation was able to invest temporary surpluses at optimal rates deriving substantial income from such investments During the year, Your Corporation obtained long term issuer rating of "Baa3" with positive outlook from M/s. Moody''s Investors Services and the above rating is at par with sovereign rating of India. With this, Your Corporation has two international credit ratings, one from M/s. Fitch Rating and the other from M/s. Moody''s Investors Services.

Leveraging Your Corporation''s reputation and image in the international market, Your Corporation was able to re-finance high cost ECB loan of US$ 465 million at significantly lower cost besides extending its maturity. The Corporation also funded its capex with foreign currency loan of US$ 250 million at very fine rates

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate Internal Financial Controls for ensuring the orderly and efficient conduct of its business, including adherence to the Corporation''s 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 or reliable information, which is commensurate with the operation of the Corporation. As part of this exercise, the design of internal controls, and its operating effectiveness, for the key business processes is tested by independent experts. Based on the review carried out, independent experts have confirmed that they are satisfied with the effectiveness and adequacy of Internal Controls over Financial Reporting. The entire activity of review and assessment of Internal Controls is carried out under the guidance of a Core Committee set-up for this purpose

RISK MANAGEMENT POLICY

Your Corporation has adopted a well-defined process for managing its risks on an ongoing basis and for conducting the business in a risk conscious manner. These self-regulatory processes and procedures are contained in our Risk Management Charter and Policy, 2007. The Corporation has a structured and comprehensive Risk Management framework, under which the risks are identified, assessed, monitored and reported, as a part of normal business practice. Your Corporation has leveraged technology to seamlessly integrate and automate the entire process of risk monitoring and reporting, which also facilitate company-wide process of managing the risks. Our risk management system is fully aligned with the corporate and operational objectives The Corporation has engaged the services of an independent expert to assist in continued implementation of effective Risk Management framework. In that direction, Risk Management Steering Committee (RMSC) continues to provide its guidance. Your Corporation has put in place mechanism to inform Board Members about the risk assessment and minimization procedures, and periodical review to ensure that executive management controls risks by means of a properly defined framework.

VIGILANCE

During the year, based on the theme of Preventive Vigilance as a tool of Good Governance, surprise inspections, CTE-type inspections, interactions with the employees including new recruits and other stakeholders were conducted. Coordination with agencies like CBI, CVC, Vigilance wing of MOP&NG etc. was done apart from carrying out investigation of complaints received from offices of MOP&NG, CVC, CBI and other sources.

Review of operating areas for system improvements such as the Retail outlet Property management, Credit Policy Management, implementation of CSR program, process of reverse auction etc. was also carried out during the year.

INDUSTRIAL RELATIONS

The year witnessed harmonious & productive Employee Relations across the Corporation as an outcome of proactive Industries Relation practices. Our continued thrust on resolving issues through continuous dialogue and maintaining a collaborative approach with Unions, workmen and other stake holders resulted in significant productivity enhancement. Various Settlements were signed with Unions in the areas of Productivity & process improvement, effective Redeployment etc. which amply demonstrates the healthy Industrial Relations climate in the Corporation

As part of Organization''s Capability building initiative and to develop second line of Union Leadership in the Unions in view of the retirement of some union leaders, training programme titled "4tcPf IFF^I WT" (Together We Win) was conducted during the year.

Further, HP Connect Workshops were held during the year for sharing Corporation''s Strategy & future growth plans, various Compensation benefit schemes and HR Policies for Union office bearers, Gaurav Award Winners etc. to enable them to become HR Champions at locations. The Corporation launched Gyanjyoti Programme for Computer Literacy of workmen in which all labour category employees have been covered Contract Labours were covered under the Prime Minister''s Jan Dhan Yojana and wages are being disbursed through e-payment Your Corporation was conferred with the "EFI National Awards for Excellence in Employee Relations for the year 2015 "(Pan India Category) at a ceremony held during the EFI National HRM Summit - 2015 on December 9-10, 2015 at Mumbai Your Corporation was also awarded with "Global HR Excellence Award for Organization with Best Employee Relation Practices" at a ceremony held during the 24th edition of World HRD Congress on February 15, 2016 at Mumbai

OFFICIAL LANGUAGE IMPLEMENTATION

Office Language Implementation (OLD has been given the utmost importance in the Corporation. Hindi is used as official Language with the spirit of persuasion and motivation and ensuring the statutory compliances pertaining to Official Language Implementation Hindi is also used in Information technology with the use of latest techniques Use of Hindi is encouraged among the employees through All India Hindi Mahotsav, Official Language conferences, competitions and workshops. Your Corporation continues to Head the Town Official Language Implementation Committee (TOLIC) in Mumbai for Government Undertakings/Corporations since its formation in 1983

Your corporation is having prominent position in Oil Sector for Official Language Implementation by winning 27 awards including ''Rajbhasha Shield'' from MOP&NG from last two years.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation constantly strives to be a model of excellence in all its endeavour be it in business prosperity or in environmental and societal stewardship. Social Development through business operations and CSR intervention always remains at the core of leadership decisions. In order to achieve these goals, Your Corporation has taken dynamic CSR activities and touched thousands of lives in the year 2015-16 across the length and breadth of the country. Efforts were made to ensure that benefits of the CSR activities reaches to the less privileged and marginalized sections of society, under the focus areas of Child Care, Education, Health Care, Skill Development, Sports, Environment and Community Development.

The Major Projects of CSR are in sync with National Developmental Policies and Sustainable Development Goals and focuses on education, health care and skill development in a holistic manner. Our Projects Nanhi Kali, Unnati and Akshaya Patra strive to meaningfully contribute to uplift the educational standards of communities. Project Nanhi Kali attempts to educate first generation girl children by providing Social, Academic and material support. Your Corporation, under Project Akshaya Patra supplemented the government effort in providing hot and nutritious meals to school children so that the students maintain good health and motivation to attend schools. IT based computer education was provided to students under Project Unnati which not only boosted their interest for being in schools but also opened wide horizons for them in life. Your Corporation has taken up Project Dhanwantari to provide free door step health care to the marginalized community located in difficult areas through Mobile Medical Vans (MMV). Project Suraksha addressed the burning issue of HIV/AIDS among the vulnerable sections of society, the long distance trucker, through free medical consultation, counselling and outreach services. Through Project Dil without Bill, free heart surgery was undertaken for economically underprivileged giving new lease of life. The Corporation attempted to create an inclusive society taking Project ADAPT which has provided sophisticated and state of the art therapies, special education and skill development to differently abled students. With aim of providing livelihood opportunity to youth, Project Swavalamban was taken during the year which contributed to Skilled India by training drop out youths in various skills and achieving employment for trained youths.

Your Corporation has enthusiastically participated in ''Swachh Bharat Abhiyan''. A large number of stakeholders were engaged with aim to make India clean. Activities were conducted at business locations for generating awareness and sensitize employees and other stakeholders. Shram Daan projects, cleanliness drive, walkathons, competitions, community meeting etc. were organized Under Swachh Vidyalaya Abhiyan, Your Corporation, completed the construction of 1245 school toilets, majority of which are in states of Andhra Pradesh, Assam, Bihar, Chhattisgarh and Odisha. Your Corporation has also taken up the initiative for the maintenance of these toilets by collaborating with state governments.

A number of initiatives were taken for the development of communities close to our Business Units in a Pan India manner. Activities were taken in all focus areas with special emphasis on activities related to Swachh Bharat Abhiyan. A number of community toilets were constructed during the year, dustbins and waste bins were provided, community drains were constructed etc. Nationa Cleanliness drive was undertaken between September 25th and October 31st all over the country where stake holders from all sections participated. Activities were taken to strengthen the institutions supporting weaker sections of society like orphanages, old age homes. Under Community Development focus area, drinking water and water for livelihood remained at the focus. Schools were provided with drinking water facility and water harvesting activities were taken for the remote rural and tribal areas. CSR Month was celebrated to generate awareness on social issues among stakeholders and to ensure the cooperation of all stakeholders in development of society. Your Corporation innovated CSR practices by developing entrepreneurs from SC/ST communities and provided them end to end training for being an independent entrepreneur. Highest ever scholarships to the students from SC/ST/ OBC and PWD were given. As an important initiative, sports were promoted among talented youth at various locations

Your corporation has used a holistic development model with a goal to empower all sections of society. An utmost concern was given to 10 Principles of UN Global Compact and these were followed in letter and spirit by all level of employees. In future we aim to innovate and expand our reach to the neediest of the person and we shall attempt that those living close to our business units are healthy, happy and educated

The details of CSR activities of the corporation containing details of CSR Committee Members, brief outline of the CSR policy, overview of the CSR initiatives, prescribed expenditure, amount spent etc., forming part of Director''s report are provided in Annexure III.

The Composition of CSR committee is as unden-

1. Shri Ram Niwas Jain Part-Time Non Official Director - Chairman

2. Shri Pushp Kumar Joshi Director - HR -Whole Time Director, Member

3. Shri B. K Namdeo Director-Refineries-Whole Time Director, Member

4. Shri Y K Gawali Director - Marketing-Whole Time Director, Member

The Committee had approved the CSR policy and the Budget. The CSR policy is uploaded on Corporation''s website, Web link of which is given herein below:

Web link to CSR Policy- http://www.hindustanpetroleum.com/csrpolicy

Web link to Projects and Programs - http://www.hindustanpetroleum.com/csrprojects

CORPORATE GOVERNANCE

Your Corporation continues to adopt the best practices of Corporate Governance to ensure transparency, integrity and accountability in its functioning. The corporate Governance Report highlighting these endeavours has been incorporated as a separate section, forming part of the Annual Report

PROCUREMENT OF GOODS & SERVICES FROM MSES

In line with the Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012, for the year 2015-16, against the set target of 20% Your Corporation has achieved 25.36% ( Rs, 1646.60 crores) procurement of goods & services from Micro & Smal Enterprises and a target of 20% has been set for the year 2016-17.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (''Act'') and Rules made there under, your Corporation has constituted Internal Complaints Committees (ICC). During the year, One (1) complaint was received by the Corporation, enquiry of which is under process. Further, Your Corporation has conducted one workshop and also developed Online Portal for all employees to create awareness. During the year, 512 officers have completed online awareness programme named ''Prevention of Sexual Harassment''

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A detailed Management Discussion and Analysis Report forms part of this Annual Report

FINANCIAL STATEMENTS OF SUBSIDIARIES

In terms of Proviso to Section 136 (1) of the Companies Act, 2013, Company will place separate audited accounts in respect of each of its Subsidiary on its website & also provide a copy of separate audited financial statement in respect of each of its Subsidiary, to any shareholder of the company who asks for it. The Financial Statements of the Subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective Subsidiary companies.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013 a separate statement containing salient features of the Financial Statement of Subsidiary/Associate/Joint Venture Companies in Form AOC-1 is attached along with Financial Statements

COST AUDIT

The Cost Audit for the financial year 2014-15 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs before the stipulated date of filing

DIRECTORS

Your Corporation''s Board presently comprises of 8 Directors. The Whole Time Directors are Shri Mukesh Kumar Surana (Chairman & Managing Director), Shri Pushp Kumar Joshi (Director- Human Resources), Shri B.K. Namdeo (Director- Refineries), Shri Y.K. Gawal (Director- Marketing) and Shri J. Ramaswamy (Director- Finance)

Shri J Ramaswamy is also appointed as Chief Financial Officer (CFO) of the Corporation in terms of requirement of Section 203 of the Companies Act, 2013

The Government Directors are Ms. Urvashi Sadhwani and Shri Sandeep Poundrik. The Part Time Non Official Director (Independent) is Shri Ram Niwas Jain

As per the provisions of Section 152 of the Companies Act, Shri Pushp Kumar Joshi & Shri Y.K. Gawali, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Appointment:

> Shri Mukesh Kumar Surana, Chairman & Managing Director of the Corporation was appointed on the Board of Your Corporation, effective 01.04.2016.

> Shri J. Ramaswamy, Director Finance (Whole Time Director) was appointed as Additional Director on the Board of Your Corporation, effective 01.10.2015. He is also appointed as Chief Financial Officer (CFO) of the Corporation

> Ms. Urvashi Sadhwani, Sr. Advisor, Ministry of Petroleum & Natural Gas and a Government Director was appointed as Additional Director, on the Board of Your Corporation, effective 04.01.2016

> Shri Ram Niwas Jain, Part-Time Non Official Director, was appointed as Additional Director on the Board of Your Corporation, effective 20.11.2015.

> Shri Anant Kumar Singh, was appointed as Part time Ex-Officio Director, on the Board of Your Corporation effective 30.09.2015. Cessation ship:

> Ms. Nishi Vasudeva, Chairman & Managing Director, has ceased to be Director of the Corporation effective 31.03.2016, on attaining the age of superannuation

> Shri K.V. Rao, Director Finance, has ceased to be Director of the Corporation effective 30.09.2015 on attaining the age of superannuation

> Shri Anant Kumar Singh, Part-Time Ex-Officio Director, has ceased to be Director of the Corporation effective 03.01.2016

> Dr. Gitesh K. Shah, Part-Time Non Official Director (Independent) has ceased to be Director of the Corporation effective 25.02.2016, on completion of tenure

The Board places on its record sincere appreciation for the valuable services rendered by the above Directors during their tenure as Directors of the Corporation

NUMBER OF MEETINGS OF THE BOARD

During the year 8 (Eight) Board meetings were convened and held. The details of the Board Meetings are given in Corporate Governance Report.

MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

Your Corporation, being a Govt. Company, is exempted to furnish information under Section 197 of companies Act, 2013 vide Ministry of Corporate Affairs (MCA) Notification dated 05/06/2015.

The details regarding the number of women employees vis-a-vis the total number of employees in each group is also given as herein below:

Group Toatal no.Of Employees No.of Women Employees % of Women Employees

A 5,568 544 9.77

B* - - -

C 4,942 333 6.74

D 28 - -

TOTAL 10,538 877 8.32

*Your Corporation, has no posts classified under group ''B'' as the entry in non-management grades has been re-classified in group ''C effective 1.1.1994.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Your Corporation, being a Government Company, the Performance Evaluation of the Company is carried by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MOP&NG) through the process of Memorandum of Understanding in each Financial Year. As per MCA Notification dated 5th June, 2015, provisions of Section 134 (3) (p) shall not apply, in case the Directors are evaluated by the Ministry, which is administratively in charge of the company.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements ) Regulations, 2015. Statement of declaration required under Section 149(6) have been obtained from the Independent Directors.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Corporation being a Government Company, is exempted to furnish information under Section 134 (3) (e) of the Companies Act, 2013 vide MCA Notification dated 05.06.2015.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSON AND OTHER EMPLOYEE

Your Corporation, being a Government Company, the remuneration payable to Key Managerial Persons and other employees are fixed by the Government of India. However, payment like Performance Related Pay is placed for the approval of Nomination and Remuneration Committee.

AUDIT COMMITTEE

The composition of Audit committee, as required under section 177(8) of the Companies Act, 2013 is given as under:

1. Shri Ram Niwas Jain Part-Time Non Official Director -Chairman

2. Shri B.K. Namdeo Whole Time Director, Member

3. Shri J Ramaswamy Whole Time Director, Member

During the year, there were no such cases observed where the Board had not accepted any recommendation of the Audit Committee

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company has appointed Shri Upendra Shukla, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure IV. There is no qualification, reservation or adverse remark made by the Practising Company Secretary in his Secretarial Audit Report

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return is annexed as Annexure V.

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the year 2015-16 are enclosed as Annexure VI

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The details on the performance and financial position of Subsidiary, Associate and Joint Venture Companies are given in Management Discussion & Analysis Report. Further, pursuant to Section 129(3) of the Companies Act, 2013 read with Rule (5) of the Companies (Accounts) Rules, 2014, the salient features of Financial Statement of Subsidiary and Joint Ventures in Form AOC-1 forms part of the Annual Report separately.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE

There are no companies, which have become or ceased to be our Subsidiary, joint venture or associate during the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the Financial Year 2015-16 there is no Order or Direction of any Court or Tribunal or Regulator which either affects Corporation''s status as a going concern or which substantially or significantly affects corporation''s business operations

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Corporation, being a Government Company is subjected to the CVC Guidelines and the Corporation has a separate Vigilance Department administering the Vigilance matters Your Corporation has a Whistle Blower Policy approved by the Board and the same is placed on the website of the Corporation Web link of whistle blower policy is stated herein below:-

Web link: https://www.hindustanpetroleum.com/documents/pdf/Whistle_Blower_policy.pdf

DETAIL OF DEPOSITS

i) Deposits accepted during the year NIL

i) Deposits remaining unpaid or unclaimed as at the end of the year NIL

iii) Default in repayment of deposit or payment of Interest thereon during the year. NIL

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, it is hereby confirmed that:

In the preparation of the Annual Accounts, the applicable Accounting standards had been followed along with proper explanation relating to material departures

i. 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 the profit and loss of the company for that period

iii. 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

iv. The Directors had prepared the Annual Accounts on a going concern basis

v. The Directors, had laid down internal financial controls to be followed by the company and that such Internal Financial Controls are adequate and are operating effectively.

vi. 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.

ACKNOWLEDGEMENTS

The Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, Petroleum Planning & Analysis Cell and the State Governments

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to our valued customers as well as for the overall performance of the Corporation

The employees of the Corporation have continued to display their total commitment towards the pursuit of excellence. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Corporation to scale even greater heights

Your Directors are thankful to the shareholders for their faith and continued support in the endeavours of the Corporation

Date : 27th May, 2016 For and on behalf of the Board of Directors

Sd/-

MUKESH KUMAR SURANA

Chairman & Managing Director

Mar 31, 2015

DEAR MEMBERS

The behalf of the Board of Directors, It gives me immense pleasure in presenting to you the sixty-third Annual Report on the working of the Company, together with the Audited Financial Statement for the financial year ended 31st March, 2015.

HIGHLIGHTS

2014-15 2013-14

FINANCIAL PERFORMANCE (Rs./Crores)

Sales/Income from Operation 2,17,061.11 2,32,275.82

Profit before Depreciation, Interest and Tax (PBDIT) 6,831.86 6,140.31

Depreciation & Amortization Expenses (1,971.15) (2,188.44)

Interest (706.59) (1,336.36)

Profit before Tax (PBT) 4,154.12 2,615.51

Provision for Tax

Current Tax 1,015.56 744.17

Deferred Tax 432.77 117.75

Taxation of earlier years written back (27.47) 19.82

MAT Credit Entitlement - -

Profit after tax (PAT) 2,733.26 1,733.77

Balance brought forward from previous year 11,269.70 10,191.90

Amount available for Appropriation 14,002.96 11,925.67

Appropriations:

General Reserve - (173.38)

Debenture Redemption Reserve (net) (137.77) 131.48

Depreciation as per Schedule II transitional provisions (499.52) -

Proposed Dividend (829.64) (524.87)

Tax on distributed profits (168.89) (89.20)

Balance carried forward 12,367.14 11,269.70

PHYSICAL PERFORMANCE (MMT)

Market Sales (Including Exports) 31.95 30.96

Crude Thruput:

Mumbai Refinery 7.41 7.74

Visakh Refinery 8.77 7.77

SHAREHOLDERS'' VALUE (Rs.)

Earnings per Share 80.72 51.20

Cash Earnings per Share 151.70 119.30

Book Value per Share 473.14 443.32

SALES/INCOME FROM OPERATIONS

Your Company has achieved sales/income from operations of Rs. 2,17,061.11 crores as compared to Rs. 2,32,275.82 crores in 2013-14.

PROFIT

Your Company has earned gross profit of Rs. 6,831.86 crores as against Rs. 6,140.31 crores in 2013-14 and profit after tax of Rs. 2,733.26 crores as compared to Rs. 1,733.77 crores in 2013-14

DIVIDEND

Your Directors, after taking into account the financial results of the Company during the year, have recommended dividend of Rs. 24.50 per share for the year 2014-15 as against Rs. 15.50 per share paid for the year 2013-14. The dividend for 2014-15, including dividend tax provision will absorb Rs. 998.53 crores (2013-14: Rs. 614.07 Crores).

INTERNAL RESOURCES GENERATION

The Internal Resources generated were Rs. 3,901.05 crores as compared to Rs. 3,618.23 crores in 2013-14.

CONTRIBUTION TO EXCHEQUER

Your Company has contributed a sum of Rs. 40,752.42 crores to the exchequer by way of duties and taxes, as compared to Rs. 36,423.47 crores in 2013-14.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that:

(i) In the preparation of the Annual Accounts, the applicable Accounting standards have been followed along with proper explanation relating to material departures.

(ii) The Company has 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 as on 31st March, 2015 and of the Statement of Profit and Loss of the company for the year ended on that date.

(iii) The Company has 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.

(iv) The Company has prepared the Annual Accounts on a going concern basis.

(v) The Company has laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

(vi) The Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Company has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The performance of the Corporation of the year 2014-15 qualifies for "Excellent" rating basis self-evaluation.

REFINERY PERFORMANCE

During the year 2014-15, your refineries have maximized crude processing which enabled a combined refining thruput of 16.18 MMT (15.51 MMT in 2013-14) which is 109% of the installed capacity.

The Overall MoU Rating for your refineries for parameters like Distillate yields, Specific Energy Consumption, Capacity utilization and Operational Availability, stands at "Excellent" level.

Your refineries have made remarkable progress in improving yields of value added products and thus recorded best ever combined distillate yield of 77.5% against a target of 74.9%. This was facilitated by robust secondary processing/treating facilities at both of our refineries i.e. FCCs and DHDS/DHT which achieved highest ever thruput and thus maximized production of transportation fuels.

To meet Euro-IV specifications for diesel, your refineries have set up Diesel Hydrotreater Units (DHT) with associated facilities at both Mumbai and Visakh Refineries. MR commissioned the facility during 2013-14 while VR commissioned it during 2014-15. The DHT units at both refineries were operated on sustained basis during the year and thus helped record best ever HSD production crossing the 6 Million Tons mark during 2014-15.In addition, the refineries have recorded the best ever MS production of 2.7 MMT during the year.

In order to reduce Suspended Intermediate Matter (SPM) and Sulphur emissions, our refineries have taken initiatives to install FGD (Flue Gas Desulphurization) facilities. Accordingly, all 4 FCCs were provided with FGD facilities at both refineries. These would enable the refineries to have flexibility to enhance High Sulphur crude processing as well.

HPCL R&D wing has developed "New Generation ''HP-HiGAS Technology'' for Absorption / Separation applications with the help of this Technology. The size of process columns could be reduced to 1/10th of the size of the existing columns with the same processing capacity. HPCL has set-up and successfully commissioned a commercially viable HiGAS unit at Visakh Refinery for removal of H2S from Refinery Fuel Gas using Amine as absorbent.

Mumbai refinery has achieved 100% recycling of effluent treated in ''Integrated Effluent Treatment Plant'' (IETP), making it a ''Zero Liquid Discharge'' ETP since April, 2014. Treated Water recycled in the year 2014-2015 was 5,74,343 KL, resulting in equivalent amount of water saving to the community.

Visakh Refinery suffered a setback due to cyclone HUDHUD that hit the east coast of India on 12th October, 2014, when as a precautionary measure, refinery units were shut down. This affected the refinery crude thruput and production of petroleum products. All out efforts were put in to restore normalcy and bring the refinery back to normal operations by the 4th week of October, 2014 after repairs. Despite this setback HPCL ensured that there was no shortfall in petroleum products during this recovery time.

As per good Refinery practices, Turnaround of every petroleum refining unit has to be taken up every 4 years.

Visakh Refinery successfully handled highest no. of equipment volume of T&I jobs in April, 2014 during MS Block TA, which involved 4 major units viz. NHT-CCR, FCC NHT, NIU, NLU and VRCFP Flare. The turnaround was completed within scheduled period of 35 days.

To regain operational efficiency, Mumbai Refinery took up T&I for FR (APS & VPS), LR VPS, PDU and SEU - I & II for a period of 45 days (oil out to oil in). Through disciplined monitoring and consistent efforts the TA was successfully completed.

Our refineries disposed scrap of 10,102 MT (5,066 MT at MR and 5,036 MT at VR). 9 LPG/propylene spheres at VR and 4 LPG spheres at MR were dismantled thereby generating space for VREP and MRMP respectively.

The particulars with respect to conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo are detailed in Annexure I.

The particulars relating to control of Pollution and Other initiative by Refineries are listed in Annexure II of Directors'' Report.

Mumbai Refinery

The year 2014-15 has been remarkable for Mumbai Refinery with the crude thruput of 7.41 MMT as against installed capacity of 6.50 MMT with capacity utilization of 114 %. The Distillate yields achieved during the year was 75.9 %. The Fuel & Loss of 7.4 % was better than the target of 7.6 %. Mumbai Refinery achieved Specific Energy Consumption (MBTU/BBL/NRGF) of 79.7 against MoU Excellent target of 82.0.

The refinery recorded best ever production Viz. HSD and LOBS (SPO II & SPO 90 N) production through efficient utilization of assets during 2014-15.

Visakh Refinery

Visakh Refinery achieved crude thruput of 8.77 MMT as against installed capacity of 8.30 MMT with capacity utilization of 106 %. Refinery achieved best ever Distillate yield of 78.8 % during the year. Energy conservation measures have helped in achieving best ever Specific Energy Consumption (MBTU/BBL/NRGF) of 82.7 against MoU Excellent target of 84. The Fuel & Loss of 7.4 % was in line with target in spite of the commissioning and sustained operation of DHT unit.

The refinery recorded best ever production of LPG, MS and HSD through efficient utilization of assets during 2014-15.

MARKETING PERFORMANCE

During the year 2014-15 your Corporation has achieved sales volume (including exports) of 31.95 Million Tonnes as against 30.96 Million Tonnes recorded in 2013-14. HPCL recorded a growth of 2.3% in domestic Sales over the sales volume of the previous year, and amongst public sector oil companies increased its market share to 20.94% as on 31st March, 2015 from 20.90% recorded in the previous year.

During the year, your Corporation commissioned 380 new Retail Outlets, which include 101 retail outlets in the rural areas taking the total tally to 13,233 Retail Outlets. Your Corporation achieved a sales volume of 21.39 Million Tonnes and increased its market share in MS and HSD (combined) by 0.05%.

In the LPG business line, your Corporation achieved a highest ever sales volume of 4.670 Million Tonnes and enrolled 42.26 Lakhs new Gas customers taking their total to 477 lakhs as on 31st March, 2015. In order to provide LPG to rural India, your Corporation commissioned 366 distributors under the Rajiv Gandhi Gramin LPG Vitaran Yojana. Your Corporation also commissioned 159 Regular LPG distributors.

The Direct Sales Business line comprises of Industrial & Commercial (I&C) and Lubes & Greases. Your Corporation achieved a sales volume of 3.97 Million Tonnes in the I & C segment and in the Lubes & Greases segment the sales recorded was 445 TMT. Products which recorded market share gains were MS, HSD, Furnace Oil, LSHS and Bitumen packed.

In the Aviation Business line, your Corporation achieved sales volume of 504 TMT during the year.

In the Natural Gas segment, 7.9 TMT of LNG was sold for the first time during the year 2014-15.

A thruput of 44.38 Million Tonnes was handled by the POL installations and your Corporation''s pipeline network achieved a thruput of 14.91 Million Tonnes during the year.

TREASURY MANAGEMENT

During the year 2014-15, interest costs came down by nearly 47% from Rs. 1,336 crores to Rs. 707 crores. The borrowings of your company were also substantially lower by 37% from Rs. 32,166 crores in the beginning of the year to Rs. 20,335 crores at the close of the year. These achievements were made possible by effective and proactive Treasury management, aided by the fall in the international prices of crude and petroleum products.

Leveraging the image of credit-worthiness of your Company amongst international bankers and investors, high cost loan of USD 400 million was refinanced at significantly lower cost during the year resulting in savings of about Rs. 50 crores over the tenure of the loan. Your Company continued with the strategy of dependence on Foreign Currency loans. Revolving line of credit in USD was also effectively utilized to manage changes in fund requirement.

Your Company initiated the process of international credit rating with M/s Fitch Ratings and has obtained Long-Term Issuer Rating of "BBB-/Stable" from them, which is at par with the sovereign rating of India.

VIGILANCE

During the year, taking ahead the concept of Vigilance for Governance, emphasis was laid on Preventive and Participative Vigilance by having regular interactions with employees and other stakeholders, carrying out surprise inspections, ensuring transparency in procurement, scrutiny of property returns filed by employees, coordination with agencies like CBI, CVC,MOP&NG etc. This was in addition to investigation of complaints received from offices of MOP&NG, CVC, CBI and other sources.

Review of operating areas for system improvements such as the process of inventory management at Refinery warehouses, Retail outlet automation effectiveness, Terminal operational arrangement with IOTL, COMCO operations etc., was carried out during the year.

INDUSTRIAL RELATIONS

Your Corporation maintained its thrust for maintaining industrial harmony which, it believes, is a pre-requisite for sustainable growth. The focus was on increased communication, productivity enhancement and employee wellbeing. The Unions and workmen demonstrated their commitment to achieve organisational objectives thru'' partnering in the various processes for increase in productivity, optimum deployment of human capital and commissioning of new Units/ rationalisation of Shifts. Settlements were signed with various Unions in Mktg. Division/ Mumbai Refinery in the areas of Productivity Enhancement, Outsourcing/ Closure of Operations, Redeployment etc. which amply demonstrate the healthy IR climate in the Corporation.

Performance management system for non-management employees was made more robust in order to assess their performance as well as for their competency development.

During the year, two programmes with an objective to enhance the leadership capabilities of our Union Representatives on Leadership Development were conducted.

A new training programme titled "Ã oaUm" (Prerna) was designed to develop awareness among Contract Workmen regarding safety at workplace, to improve the work-life balance by imparting awareness on stress management, time management, relationship management, importance of health and hygiene and to augment their financial acumen by providing information on financial planning, benefits under various Social Security Schemes launched by Government of India etc.

OFFICIAL LANGUAGE IMPLEMENTATION

Office Language Implementation (OLI) has been given the utmost importance in the Corporation. To promote implementation of Official Language with the spirit of persuasion and motivation, various programs like Hindi Pakhwada, Hindi workshops, Hindi Coordinators Conferences, Zonal OL Conferences were organized.

Your Corporation continues to Head the Town Official Language Implementation Committee (TOLIC) in Mumbai for Government Undertakings/Corporations since its formation in 1983.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation believes in shared value creation and interdependency of business and stakeholders. In line with this, the revised CSR policy of the corporation pens down the philosophy of HPCL CSR, defines the ambit of CSR and brings uniformity in various operations and functionalities of the structure and its activities. During 2014-15, the corporation invested Rs. 34.07 Crores in the implementation of various CSR initiatives in the focus areas of Childcare, Education, Healthcare, Skill Development, Sports, Environment and Community Development, creating social capital, especially in the host communities of the business.

The Committee had approved the CSR policy and the Budget. The CSR policy is uploaded on Company''s website. Further, the Report on CSR Activities/ Initiatives is enclosed as Annexure III.

Weblink to CSR Policy - http://www.hindustanpetroleum.com/csrpolicy

Weblink to Projects and Programs - http://www.hindustanpetroleum.com/csrprojects

CORPORATE GOVERNANCE

The Corporation has complied with the requirements of Corporate Governance as provided under Clause 49 of the Listing Agreement and DPE Guidelines on Corporate Governance, with the exception of appointment of Independent Directors to the level of 50% of the total strength of the Board. The matter is being pursued with the Administrative Ministry.

The detailed Corporate Governance Report forms part of this Annual Report separately.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A detailed Management Discussion and Analysis Report is given separately.

MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

Your Company being a Government Company, is exempted from the provision of Section 197 of the Companies Act, 2013 vide Ministry of Corporate Affairs (MCA) Notification dated 05.06.2015.

The details regarding the number of women employee''s vis-Ã -vis the total number of employees in each group is also given in

Annexure IV.

FINANCIAL STATEMENTS OF SUBSIDIARIES

In terms of Proviso to Section 136 (1) of the Companies Act, 2013, Company will place separate audited accounts in respect of each of its subsidiary on its website & also provide a copy of separate audited financial statement in respect of each of its subsidiary, to any shareholder of the company who asks for it. The annual accounts of the subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies.

COST AUDIT

The Cost Audit for the financial year 2013-14 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs before the stipulated date of filing.

DIRECTORS

HPCL Board presently comprises of 7 Directors. The Whole Time Directors are Ms. Nishi Vasudeva (Chairman &Managing Director), Shri Pushp Kumar Joshi (Director - HR), Shri K.V. Rao (Director - Finance), Shri B.K. Namdeo (Director -Refineries) and Shri YK. Gawali (Director - Marketing).

The Part-Time Ex-Officio Director is Shri Sandeep Poundrik. The Part-Time Non Official Director(Independent) Director is Dr. Gitesh K. Shah.

The following are the details of directors'' appointment/ cessation:

- S/Shri G.K. Pillai, A.C. Mahajan and Dr. G. Raghuram who have joined the HPCL Board on April, 09, 2012 ceased tobe Part-Time Non Official Directors of the Corporation effective April 08, 2015 on completion of their tenure of 3 years. Shri Rohit Khanna ceased to be Director of HPCL Board effective September 5, 2014. The Board places on record their sincere appreciation to S/Shri G.K. Pillai, A.C. Mahajan, Dr. G. Raghuram & Shri Rohit Khanna for the valuable services rendered by them during their tenure as Directors of the Corporation.

- Dr. S.C. Khuntia, who have joined HPCL Board effective August 03, 2012 has ceased to be Part-Time Ex-Officio Director in HPCL effective June 15, 2015. Shri R. K Singh who joined HPCL Board effective June 26, 2013 has ceased to be a part time Ex-Officio Director effective October 15, 2014.

- Shri YK Gawali, Director Marketing and a Whole Time Director was appointed as Additional Director on the Board of HPCL effective October 10, 2014.

- Shri Sandeep Poundrik, Part-Time Ex-Officio Director, was appointed as Additional Director on the Board of HPCL effective October 16, 2014.

- Shri Gitesh K Shah, who joined HPCL Board on February 26, 2013 as Part-Time Non Official Director continue to be Director of the Corporation.

- Ms. Nishi Vasudeva, Chairman and Managing Director, S/Shri Pushp Kumar Joshi - Director HR, K.V. Rao - Director Finance and B.K. Namdeo - Director Refineries continue as Whole Time Directors of the Corporation.

- As per the provisions of Section 152 of the Companies Act, 2013, Shri K.V. Rao and Shri B.K. Namdeo retire by rotation at the next Annual General Meeting and being eligible, offer themselves for re-appointment.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

- Shri Y K Gawali was appointed as Additional Director & Director-Marketing on the Board of HPCL effective October 10, 2014.

- Shri Sandeep Poundrik was appointed as Additional Director & Part-time Ex-Officio Director on the Board of HPCL effective October 16, 2014.

- Shri Rohit Khanna, who was appointed as Additional Director by the Board effective September 27, 2013 has ceased to be Director effective September 05, 2014.

NUMBER OF MEETINGS OF THE BOARD

During the year nine Board meetings were convened and held. The details of which are given in corporate governance report.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

HPCL being a Government Company, the performance evaluation of the Company is carried by the Administrative Ministry through the process of Memorandum of Understanding every Financial Year. Further there is also performance evaluation of Functional Directors by MOP&NG. MCA has now exempted Government companies from the provision of Section 134 (3)(p) of the Companies Act, 2013 vide Notification dated 05.06.2015.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Company being a Government Company, is exempted to furnish information under Section 134 (3) (e) of the Companies Act, 2013 vide MCA Notification dated 05.06.2015.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSONS AND OTHER EMPLOYEES

HPCL being a Government Company, the remuneration payable to the Key Managerial Persons (KMP) and other employees is fixed by the Government of India. However, payment like Performance Related Pay is placed for the approval of the Nomination and Remuneration Committee.

Committees of Board

The details of composition of the Committees of the Board of Directors as of 31st March, 2015 are as under:-

(a) Audit Committee

Sr. No. Name Chairman/ Members

1 Shri A C Mahajan Chairman

2 Dr. G Raghuram Member

3 Shri K V Rao Member

(b) Corporate Social Responsibility Committee

Sr. No. Name Chairman/ Members

1 Shri G.K. Pillai Chairman

2 Shri A.C. Mahajan Member

3 Dr. G. Raghuram Member

4 Dr. Gitesh K.Shah Member

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of Companies Act, 2013 and Clause 49 of Listing Agreement. Statement of declaration required under Section 149(6) have been obtained from the Independent Directors.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company has appointed Shri Upendra Shukla, Practising Company Secretary to undertake the secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure V. There is no qualification, reservation or adverse remark made by the company secretary in practice in his Secretarial Audit Report.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is Annexed as Annexure VI.

INTERNAL FINANCIAL CONTROLS

Your Company has put in place a mechanism to ensure that the effectiveness of its Internal Control Framework is assessed on an ongoing basis, and corrective steps are taken, wherever required. As part of this exercise, the design of internal control, and its operating effectiveness, for the key business processes is tested by independent experts. Based on the review carried out, independent experts have confirmed that they are satisfied with the effectiveness and adequacy of HPCL''s internal controls over financial reporting. The entire activity of review and assessment of Internal Controls is carried out under the guidance of a Core Committee set-up for this purpose.

RISK MANAGEMENT POLICY

HPCL has adopted a well-defined process for managing its risks on an ongoing basis and for conducting the business in a risk conscious manner. These self-regulatory processes and procedures are contained in our Risk Management Charter and Policy. The Company has a structured and comprehensive Risk Management framework, under which the risks are identified, assessed, monitored and reported, as a part of normal business practice. HPCL has leveraged technology to seamlessly integrate and automate the entire process of risk monitoring and reporting, which also facilitate company-wide process of managing the risks. HPCL''s risk management system is fully aligned with the corporate and operational objectives.

The Company has engaged the services of independent experts to assist in continued implementation of effective Risk Management framework. In that direction, Risk Management Steering Committee (RMSC) continues to provide its guidance. The Company has put in place mechanism to inform Board Members about the risk assessment and minimization procedures, and periodical review to ensure that executive management controls risks by means of a properly defined framework.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

HPCL being a Government Company is subjected to the CVC Guidelines and the Corporation has a separate Vigilance Department administering the Vigilance matters.

HPCL has a Whistle Blower Policy approved by the Board and the details are placed on the Website of the Corporation. Weblink of whistle blower policy is stated herein below:- Weblink:- https://www.hindustanpetroleum.com/documents/pdf/Whistle_Blower_policy.pdf

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the year 2014-15 are enclosed as Annexure VII.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The details on the performance and financial position of Subsidiary, Associate and Joint Venture Companies are given in Management Discussion & Analysis Report. Further, Pursuant to Section 129 (3) of the Companies Act, 2013 read with Rule (5) of the Companies (Accounts) Rules, 2014, the salient features of Financial Statement of Subsidiary and Joint Ventures in Form AOC -1 forms part of this Annual Report Separately.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE

(a) Companies become HPCL''s Subsidiaries, Joint Ventures or Associates: - Mumbai Aviation Farm fuel facilities Pvt Ltd.

(b) Companies cease to be HPCL''s Subsidiaries, Joint Ventures or Associates:

There is no company, which has ceased to be HPCL''s subsidiary, Joint venture or Associate during the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the company and its future operations.

DETAILS OF DEPOSITS

Particulars Amount (Rs. in Crores)

Deposits accepted during the year NIL

Deposits remained unpaid or unclaimed as at the end of the year 0.02*

In case, there is default in repayment of deposit or payment of interest thereon during the year and if so, N.A. number of such cases and the total amount involved -

a) At the beginning of the year

b) Maximum during the year

c) At the end of the year

* The Company has deposited the amount in Investor Education and Protection Fund on 11th May, 2015. Note: - All deposits are in compliance with the requirements of Chapter V of the Act.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (''Act'') and Rules made thereunder, your Corporation has constituted Internal Complaints Committees (ICC). During the year 02 complaints were received by the Corporation and the same were investigated and resolved as per the provisions of the Act.

PROCUREMENT OF GOODS & SERVICES FROM MSES:

In line with the Public Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012, for the year 2014-15, against the set target of 18.51% HPCL has achieved 19.59% (Rs. 1138.07 crores) procurement of goods & services from Micro & Small Enterprises and a target of 20% has been set for the year 2015-16.

ACKNOWLEDGEMENTS

The Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, Petroleum Planning & Analysis Cell and the State Governments.

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to our valued customers as well as for the overall performance of the Company.

The employees of the Company have continued to display their total commitment towards the pursuit of excellence. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Company to scale even greater heights.

Your Directors are thankful to the shareholders for their faith and continued support in the endeavors of the Company.

For and on behalf of the Board of Directors

NISHI VASUDEVA

Date : 26.06.2015 Chairman & Managing Director

Mar 31, 2014

TO THE MEMBERS

On behalf of the Board of Directors, I have great pleasure in presenting to you the sixty-second Annual Report on the working of the Company, together with the Audited Accounts for the year ended 31st March, 2014.

HIGHLIGHTS

Rs. / Crores

2013-14 2012-13 FINANCIAL

Sales/Income from Operation 2,32,188.35 2,15,666.45

Profit before Depreciation, Interest and Tax 6,140.31 4,821.78

Depreciation (2,188.44) (1,934.42)

Interest (1,336.36) (1,412.80)

Profit before Tax 2,615.51 1,474.56

Provision for Tax

Current Tax 744.17 (250.58)

Deferred Tax 117.75 (440.95)

Taxation of earlier years written back 19.82 60.62

MAT Credit Entitlement - 61.06

Profit after Tax 1733.77 904.71

Balance brought forward from previous year 10,191.90 9,682.74

Appropriations:

General Reserve (173.38) (90.47)

Debenture Redemption Reserve (net) 131.48 31.67

Proposed Dividend (524.87) (287.83)

Tax on distributed profits (89.20) (48.92)

Balance carried forward 11,269.70 10,191.90

PHYSICAL PERFORMANCE (MMT)

Market Sales (Including Exports) 30.96 30.32

Crude Thruput:

Mumbai Refinery 7.74 7.75

Visakh Refinery 7.77 8.03

SHAREHOLDERS'' VALUE (Rs.)

Earnings per Share 51.20 26.72

Cash Earnings per Share 119.30 96.86

Book Value per Share 443.32 405.35

DIVIDEND

Your Directors, after taking into account the financial results of the Company during the year, have recommended dividend of Rs. 15.50 per share for the year 2013-14 as against Rs. 8.50 per share paid for the year 2012-13. The dividend for 2013-14, including dividend tax provision will absorb Rs. 614.07 crores (2012-13: Rs. 336.75 crores).

SALES/INCOME FROM OPERATIONS

Your Company has achieved sales/income from operations of Rs. 2,32,188.35 crores as compared to Rs. 2,15,666.45 crores in 2012-13.

PROFIT

Your Company has earned gross profit of Rs. 6,140.31 crores as against Rs. 4,821.78 crores in 2012-13 and profit after tax of Rs. 1,733.77 crores as compared to Rs. 904.71 crores in 2012-13.

INTERNAL RESOURCES GENERATION

The Internal Resources generated were Rs. 3,618.23 crores as compared to Rs. 3015.45 crores in 2012-13.

CONTRIBUTION TO EXCHEQUER

Your Company has contributed a sum of Rs. 36,423.47 crores to the exchequer by way of duties and taxes, as compared to Rs. 32,173.50 crores in 2012-13.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, your Directors state that:

(i) In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

(ii) The Company has 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 as on 31st March, 2014 and of the Statement of Profit & Loss of the Company for the year ended on that date.

(iii) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) These Accounts have been prepared on a going concern basis.

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Company has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The performance of the Corporation of the year 2013-14 qualifies for "Excellent" rating basis self-evaluation.

REFINERY PERFORMANCE

During the year, your refineries processed a combined crude thruput of 15.51 MMT (15.78 MMT in 2012-13) with a capacity utilization of 105% of the installed capacity of 14.80 MMT.

The Combined distillate yield of 74.2% was realized by processing High Sulphur / Low Sulphur crude in the ratio of 59:41.

The Overall MOU Rating for your refineries for parameters Viz. Crude throughput, Distillate yields, Specific Energy Consumption, Projects, Sustainable development, HSE and R&D stands at "Very Good" level.

Refineries have achieved best ever production in MS (2,676 TMT) and LOBS (386 TMT).

Gross refining margins of Mumbai Refinery averaged at US $ 5.38 per barrel as against US $ 2.08 per barrel for the year 2012-13.

Gross refining margins of Visakh Refinery averaged at US $ 1.50 per barrel as against US $ 2.08 per barrel for the year 2012-13.

Your Refineries strive to utilize every opportunity to effectively address capacity augmentation/yield improvement. Accordingly, Mumbai refinery has augmented Propane DeAsphalting (PDA) unit capacity resulting in enhanced Lube Base oil production and thereby improving distillate yields. Visakh Refinery has carried out augmentation jobs for Propylene Recovery Unit (PRU), commissioned chiller package and started using bottom cracker additive Fluidized Catalyst Cracking (FCC) unit, which resulted in reduced production of heavy ends. These efforts have resulted in the yield improvement at Visakh Refinery.

In order to reduce Suspended Particulate Matter (SPM) and Sulphur emissions, your refineries have installed Flue Gas Desulphurization (FGD) facility. This will enable both the refineries to have flexibility to enhance High Sulphur Crude Processing as well.

To meet Euro-IV specifications for diesel, your refineries have set up Diesel Hydrotreater Units (DHT) with associated facilities at both Mumbai and Visakh Refinery. Mumbai Refinery has commissioned the facility during 2013-14. Visakh Refinery have accomplished mechanical completion of the unit, pre-commissioning/ commissioning activities are in progress.

Your refineries have taken part in the performance Benchmarking study along with the other refiners in the country conducted by M/s Solomon Associates under the aegis of CHT, the results of which has identified gaps in energy utilization. In order to bridge these gaps short and long term measures have been identified and will be implemented in a time bound manner.

Mumbai refinery has recorded the best ever Specific Energy Consumption (MBTU/BBL/NRGF) of 75.4 against MOU Excellent target of 87.0. Similarly, Visakh refinery has also achieved the best ever Specific Energy Consumption (MBTU/BBL/NRGF) of 83.9 against MoU Excellent target of 87.0.

Mumbai Refinery

The year 2013-14 has been remarkable for Mumbai Refinery with the crude throughput of 7.74 MMT as against installed capacity of 6.50 MMT with capacity utilization of 119%. It has achieved 73.5% Distillate yields and the corresponding Fuel & loss was 6.9% for the year.

Refinery recorded best ever production of HSD EURO III (2166 TMT), RPO (146 TMT) and LOBS (386 TMT) production through effective utilization of assets during 2013-14.

Visakh Refinery

Visakh Refinery achieved crude thruput of 7.77 MMT as against installed capacity of 8.30 MMT with capacity utilization of 85%. It has achieved 74.8 % Distillate yields and the corresponding Fuel & loss was 7.6% for the year.

The refinery recorded best ever production of LPG (423 TMT) and BS III MS (1100 TMT) during 2013-14.

The particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo are detailed in Annexure I.

The particulars relating to control of Pollution and other initiatives by Refineries are listed in Annexure II of Directors'' Report.

MARKETING PERFORMANCE

During the year 2013-14 your Corporation has achieved sales volume (including exports) of 30.96 Million Tonnes as against 30.32 Million Tonnes recorded in 2012-13. HPCL recorded a growth of 4.1% in domestic Sales over the sales volume of the previous year, and amongst public sector oil companies increased its market share to 20.90% as on 31st March, 2014 from 20.19% recorded in the previous year.

During the year, your Corporation commissioned 723 new Retail Outlets, which include 223 retail outlets in the rural areas taking the total tally to 12,869 Retail Outlets. Your Corporation achieved a sales volume of 21.3 Million Tonnes and increased its market share in MS and HSD (combined) by 0.15%.

In the LPG business line, your Corporation achieved a sales volume of 4.205 Million Tonnes and enrolled 39.15 Lakhs new HP Gas customers taking their total to 432 lakhs as on 31st March, 2014. In order to provide LPG to rural India, your Corporation commissioned 219 distributors under the Rajiv Gandhi Gramin LPG Vitaran Yojana. Your Corporation also commissioned 95 Regular LPG distributors.

The Direct Sales Business line comprises of Industrial & Commercial (I & C) and Lubes & Greases. Your Corporation achieved a sales volume of 3.866 Million Tonnes in the I & C segment recording a market share gain of 1.79% (among PSUs). In the Lubes & Greases segment the sales recorded was 485 TMT with a growth of 15.3% and market share gain of 4.15%.

In the Aviation Business line, your Corporation achieved sales volume of 445 TMT during the year.

In the Natural Gas segment, your company has during the year formed a Joint Venture (JV) company HPCL Shapoorji Energy Limited (HSEL) with S P Ports Pvt. Ltd for setting up a LNG Re-gasification Terminal at Chara, Gujarat. In addition your company has taken 11% equity participation in gas pipelines Mehsana-Bhatinda-Jammu-Srinagar Pipeline (MBJSPL) and Mallavaram Â Bhopal Â Bhilwara Â Vijapur pipeline (MBBVPL) along with GSPL, IOCL & BPCL which is being undertaken by JV Company GIGL and GITL.

A thruput of 43.28 Million Tonnes was handled by the POL installations and your Corporation''s pipeline network achieved a thruput of 15.69 Million Tonnes during the year.

TREASURY MANAGEMENT

The year 2013/14 was a challenging year from Treasury Management point of view. Starting on a stable note during the initial months, the rupee depreciation against dollar touched a peak of 27% in August 2013 before a series of measures were introduced. With the high Re depreciation and dependence on imported crude, management of foreign exchange liabilities, exchange rate variations and cost of funding posed huge challenges as these impact profitability. All these challenges were handled proactively and effectively and the financial year 2013-14 ended with significant lower interest and exchange variation costs.

VIGILANCE

During the year, the Vigilance Department, continuing with its endeavour to create an environment of proactive vigilance, carried out interactive sessions with Officials covering various locations. These sessions, inter alia, included topics of vigilance awareness and functioning, irregularities taking place in various works and aspects of preventive vigilance. The focus was both on preventive vigilance and investigative vigilance mechanism.

Some of the key contributions relate to reviews in various operating areas such as Project monitoring, Standardization of Dispensing euipments, IT procurement , vendor rating systems besides increasing the awareness through in house publications on various topics of business relevance ,field inspections, tender review etc.

INDUSTRIAL RELATIONS

Your Corporation continued its tradition of resolving issues through dialogue and maintaining a collaborative approach with Unions and workmen and other stake holders. This enabled enhancing productivity norms, redeployment of workmen across Marketing locations and Refinery Units at Mumbai Refinery & Visakh Refinery for commissioning of new Units/ rationalisation of Shifts. Regular meetings were held with the representatives of Unions to deliberate on various challenges and opportunities concerning Organisation as well as workmen.

A Leadership Development Programme for Union Representatives was developed and conducted in collaboration with Centre for Organization Development, Hyderabad with an objective to enhance the leadership capabilities of our Union Representatives. 30 Union Representatives attended the programme.

OFFICIAL LANGUAGE IMPLEMENTATION

Official Language Implementation has been given utmost importance in the Corporation. Your Corporation was awarded the prestigious Indira Gandhi Rajbhasha Award for the sixth consecutive year by Home Ministry.

GMO EZ and LPG SBU NZ were awarded Regional Rajbhasha puraskar by Department of Official Language, Home Ministry. Under the Chairmanship of our C&MD, Mumbai TOLIC was awarded 2nd prize by Department of Official Language, Home Ministry.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation has contributed to social development and empowerment of less privileged sections of society by taking initiatives under CSR. The corporation has aligned CSR with its business and made efforts for holistic growth of communities located in different parts of the country. The corporation invested Rs. 23.74 Crores in fields of Child Care, Education, Health Care, Skill Development and Community Development and have touched lives of weaker sections of society specially SC/ST, women and children.

CORPORATE GOVERNANCE

The Corporation has complied with the requirements of Corporate Governance as provided under Clause 49 of the Listing Agreement and DPE Guidelines on Corporate Governance, with the exception of appointment of Independent Directors to the level of 50% of the total strength of the Board. The matter is being pursued with the Administrative Ministry.

The detailed Corporate Governance Report forms part of this Annual Report separately.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A detailed Management Discussion and Analysis Report is given separately.

PARTICULARS OF EMPLOYEES

A statement providing the information as required under Section 217 (2A) of the Companies Act, 1956 is given in Annexure III to this report. The details regarding the number of women employee''s vis-Ã -vis the total number of employees in each group is also given in Annexure IV.

FINANCIAL STATEMENTS OF SUBSIDIARIES

In accordance with the general exemption granted by the Ministry of Corporate Affairs, Government of India, the Annual Accounts and related information of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies.

COST AUDIT

The Cost Audit for the financial year 2012-13 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs before the stipulated date of filing.

DIRECTORS

HPCL Board presently comprises of 11 Directors. The Whole Time Directors are Smt. Nishi Vasudeva (Chairman & Managing Director), Shri Pushp Kumar Joshi (Director - HR), Shri K. V. Rao (Director - Finance), Shri B.K. Namdeo (Director - Refineries). The position of Director (Marketing) is presently vacant.

The Part-Time Ex-Officio Directors are Dr. S.C. Khuntia and Shri R.K. Singh. The Part-Time Non Official (Independent) Directors are Shri G.K. Pillai, A.C. Mahajan, Dr. G. Raghuram, Dr. Gitesh K. Shah and Rohit Khanna.

The following are the details of Directors appointment/ cessation:

- Shri Anil Razdan and Shri S.K. Roongta who had joined HPCL Board on January 10, 2011 ceased to be Part-Time Non Official (Independent) Directors of the Corporation effective January 09, 2014 on completion of their tenure of 03 years. The Board places on record its sincere appreciation to S/Shri Anil Razdan and S.K. Roongta for the valuable services rendered by them during their tenure as Directors of the Corporation.

- S/Shri G.KPillai, A.C. Mahajan and Dr. G. Raghuram who have joined HPCL Board on April 09, 2012 continue to be Part-Time Non Official (Independent) Directors of the Corporation.

- Dr. Gitesh K. Shah who has joined HPCL Board on February 26, 2013 as a Part-Time Non-Official (Independent) Director continues to be a Part-Time Non Official Director of the Corporation.

- Shri Rohit Khanna was appointed as Part-Time Non Official (Independent) Director on the Board of HPCL effective September 27, 2013.

- Shri S. Roy Choudhury, Chairman & Managing Director, retired from the services of the Corporation effective February 28, 2014 on attaining the age of superannuation. The Board places on record its sincere appreciation for the valuable services rendered by him during his tenure as Chairman and Managing Director of the Corporation.

- Smt. Nishi Vasudeva, Director (Marketing), was appointed as Chairman and Managing Director of the Corporation effective March 01, 2014. S/Shri Pushp Kumar Joshi, Director HR, K.V. Rao, Director (Finance) and B.K. Namdeo, Director (Refineries) continue as Whole - Time Directors of the Corporation.

As per the provisions of Section 152 of the Companies Act, 2013, Dr. S.C. Khuntia and Shri Pushp Kumar Joshi retire by rotation at the next Annual General Meeting and are eligible for reappointment.

ACKNOWLEDGEMENTS

The Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, Petroleum Planning & Analysis Cell and the State Governments.

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to our valued customers as well as for the overall performance of the Company.

The employees of the Company have continued to display their total commitment towards the pursuit of excellence. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Company to scale even greater heights.

Your Directors are thankful to the shareholders for their faith and continued support in the endeavors of the Company.

For and on behalf of the Board of Directors

NISHI VASUDEVA

Chairman & Managing Director

28th May, 2014

Mar 31, 2013

TO THE MEMBERS

The behalf of the Board of Directors, I have great pleasure in presenting to you the sixty-first Annual Report on the working of the Company, together with the Audited Accounts for the year ended 31st March, 2013.

HIGHLIGHTS

Rs. / Crores

2012-13 2011-12

FINANCIAL

Sales/Income from Operation 2,15,675.49 1,88,130.95

Profit before Depreciation, Interest and Tax 5,428.31 5,156.44

Depreciation (1,934.42) (1,712.93)

Interest (2,019.33) (2,224.27)

Profit before Tax 1,474.56 1,219.24

Provision for Tax

Current Tax (250.58) (396.65)

Deferred Tax (440.95) (6.94)

Taxation of earlier years written back 60.62 95.78

MAT Credit Entitlement 61.06 -

Profit after Tax 904.71 911.43

Balance brought forward from previous year 9,682.74 9,373.13

Appropriations:

General Reserve (90.47) (91.14)

Debenture Redemption Reserve (net) 31.67 (176.15)

Proposed Dividend (287.83) (287.83)

Tax on Distributed Profits (48.92) (46.70)

Balance Carried Forward 10,191.90 9,682.74

PHYSICAL PERFORMANCE (MMT)

Market Sales (Including Exports) 30.32 29.48

Crude Thruput:

Mumbai Refinery 7.75 7.51

Visakh Refinery 8.03 8.68

SHAREHOLDERS'' VALUE (Rs.)

Earnings per Share 26.72 26.92

Cash Earnings per Share 96.86 77.70

Book Value per Share 405.35 387.52

DIVIDEND

Your Directors, after taking into account the financial results of the Company during the year, have recommended dividend of Rs. 8.50 per share for the year 2012-13 as against Rs. 8.50 per share paid for the year 2011-12. The dividend for 2012-13, including dividend tax provision will absorb Rs. 336.75 Crores (2011-12: Rs. 334.53 Crores).

SALES/INCOME FROM OPERATIONS

Your Company has achieved sales/income from operations of Rs. 2,15,675.49 Crores as compared to Rs. 1,88,130.95 Crores in 2011-12.

PROFIT

Your Company has earned gross profit of Rs. 5,428.31 Crores as against Rs. 5,156.44 Crores in 2011-12 and profit after tax of Rs. 904.71 Crores as compared to Rs. 911.43 Crores in 2011-12.

INTERNAL RESOURCES GENERATION

The Internal Resources generated were Rs. 3,015.45 Crores as compared to Rs. 2,179.48 Crores in 2011-12.

CONTRIBUTION TO EXCHEQUER

Your Company has contributed a sum of Rs. 32,173.50 Crores to the exchequer by way of duties and taxes, as compared to Rs. 31,300.53 Crores in 2011-12.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, your Directors state that:

(i) In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

(ii) The Company has 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 as on 31st March, 2013 and of the Statement of Profit & Loss of the Company for the year ended on that date.

(iii) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) These Accounts have been prepared on a going concern basis.

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Company has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The performance of the Corporation of the year 2012-13 qualifies for "Excellent" rating basis self-evaluation.

REFINERY PERFORMANCE

HPCL refineries processed a combined crude thruput of 15.78 MMT (16.19 MMT in 2011-12) with a capacity utilization of 107% of the installed capacity of 14.80 MMT

The Combined distillate yield of 73.0% was realized by processing High Sulphur / Low Sulphur crude in the ratio of 65:35.

The Overall MoU Rating for HPCL refineries for parameters Viz. Crude throughput, Distillate yields, Specific Energy Consumption, projects, Sustainable development, HSE and R&D stands at "Very Good" level.

Refineries have achieved best ever production in LPG (818 TMT), MS (2,619 TMT) and Bitumen which has crossed 1 million mark (1,042 TMT).

Gross refining margins of Mumbai Refinery averaged at US $ 2.08 per barrel as against US $ 2.83 per barrel for the year 2011-12. Gross refining margins of Visakh Refinery averaged at US $ 2.08 per barrel as against US $ 2.95 per barrel for the year 2011-12. Mumbai Refinery:

The year 2012-13 has been remarkable for Mumbai Refinery with the crude throughput of 7.75 MMT as against installed capacity of 6.50 MMT with capacity utilization of 119%. The refinery has also set a milestone by recording the highest ever crude thruput surpassing the previous best of 7.51 MMT during 2011-12.

The Distillate yields achieved during the year was 73.5%. Mumbai Refinery attained Specific Energy Consumption (MBTU/BBL/ NRGF) of 82.6 against MoU Excellent target of 86.0.

The Fuel and loss figure of 7.5% was better than the target of 8.0%.

Refinery recorded best ever production Viz. MS, RPO and Bulk Bitumen production through effective utilization of assets during 2012-13.

Visakh Refinery :

Visakh Refinery achieved crude thruput of 8.03 MMT as against installed capacity of 8.30 MMT with capacity utilization of 96%. The Distillate yield achieved during the year was 72.6%. It has also contributed in optimizing Fuel and loss figures recording 7.6% was better than the target of 8.1%

Refinery recorded best ever production viz. LPG, Bitumen through optimum utilization of assets during the year 2012-13.

The refinery has taken proactive role in the area of energy conservation and has achieved significant improvement in the area of energy conservation by continuously practicing the energy conservation techniques and implementing energy conservation projects.

These measures have helped in achieving best ever Specific Energy Consumption (MBTU/BBL/NRGF) of 84.0 against MoU Excellent target of 88.0.

The particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo are detailed in Annexure I.

The particulars relating to control of Pollution and other initiatives by Refineries are listed in Annexure II of Directors'' Report.

MARKETING PERFORMANCE

During the year 2012-13, your Corporation has achieved sales volume (including exports) of 30.32 Million Tonnes as against 29.48 Million Tonnes recorded in 2011-12. HPCL recorded a growth of 4.70% in Marketing Sales, over the sales volume of the previous year and amongst public sector oil companies increased its market share to 20.19% as on 31st March, 2013 from 19.96% recorded in the previous year.

During the year, your Corporation commissioned 1,018 new Retail Outlets, which include 318 retail outlets in the rural areas taking the total tally to 12,173 Retail Outlets. Your Corporation increased its market share in MS and HSD (combined) by 0.14%. In the LPG business line, your Corporation enrolled 32.17 Lakhs new HP Gas Domestic customers taking their total to 395 lakhs as on 31st March, 2013. In order to provide LPG to rural India, your Corporation commissioned 243 distributors under the Rajiv Gandhi Gramin LPG Vitaran Yojana. Your Corporation also commissioned 54 Regular LPG distributors.

The Direct Sales Business line comprises of Industrial & Commercial (I&C) and Lubes & Greases. Your Corporation achieved a marketing sales volume of 3,985 TMT in the I&C segment, posting a growth of 1% and market share gain of 0.20%. In the Lubes & Greases segment the marketing sales recorded was 427 TMT with a growth of 6.4% and market share gain of 1.65%. In the Aviation Business line, your Corporation achieved sales of 567 TMT during the year. A record thruput of 43.2 Million Tonnes was handled by POL installations and your Corporation''s pipeline network achieved a thruput of 14.04 Million Tonnes during the year, exceeding the targeted thruput.

VIGILANCE

During the year, the Vigilance Department, continuing with its endeavor to create an environment of proactive vigilance, carried out interactive sessions with officials covering various locations. These sessions included the topic of vigilance awareness and functioning and importance of preventive vigilance.

On the occasion of Vigilance Awareness Week Observed from 29th October, 2012 to 3rd November, 2012 at various locations, various competitions like slogan writing, quiz, essay writing contest etc. were organized for creating awareness amongst the employees. These competitions were also held in the schools and colleges all over India.

INDUSTRIAL RELATIONS

Industrial Relations across the Corporation remained positive and constructive, marked by mutual trust and industrial harmony. Union leadership and workmen played a significant role in achieving performance objectives at their work units/locations across the country through their collaboration in introduction of new technology, acceptance of cost management practices, and rationalization of manpower through internal redeployment to fill vacant positions. With a view to enhance employee participation in meeting the challenges of the future, an Industrial Relations Council comprising members from the senior levels of Management drawn from Business Units and Human Resources together with senior office bearers from each of the representative Unions operating in the Corporation has been formed.

A series of workshops were conducted for employees to emphasize ethics in the conduct of business and to ensure that the affairs of the Corporation are managed in a transparent and ethical manner.

OFFICIAL LANGUAGE IMPLEMENTATION

Official Language Implementation has been given the utmost importance in the Corporation. The Corporation was awarded prestigious Indira Gandhi Rajbhasha Award for the fifth consecutive year by Home Ministry.

CORPORATE SOCIAL RESPONSIBILITY

HPCL has a deep understanding of the impact it can make on society and is committed to the Social investment to support communities and the broader society in which we operate. During the year we have spent an amount of Rs. 21.76 Crores on CSR. Our focus areas have been Child Care, Education, Health Care, Skill Development and others including SC/ST beneficiaries.

CORPORATE GOVERNANCE

The Corporation has complied with the requirements of Corporate Governance as provided under Clause 49 of the Listing Agreement and DPE guidelines on Corporate Governance.

The detailed Corporate Governance Report forms part of this Annual Report separately.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A detailed Management Discussion and Analysis Report has been given separately.

PARTICULARS OF EMPLOYEES

A statement providing the information as required under Section 217 (2A) of the Companies Act, 1956 is given in Annexure III to this report. The details regarding the number of women employee''s vis-a-vis the total number of employees in each group is also given in Annexure IV.

FINANCIAL STATEMENTS OF SUBSIDIARIES

In accordance with the general exemption granted by the Ministry of Corporate Affairs, Government of India, the Annual Accounts and related information of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies.

COST AUDIT

The Cost Audit for the financial year 2011-12 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs before the stipulated date of filing.

DIRECTORS

HPCL Board presently comprises of 13 Directors. The Whole Time Directors are Shri S. Roy Choudhury (Chairman & Managing Director), Shri B. Mukherjee (Director - Finance), Shri K. Murali (Director - Refineries), Smt. Nishi Vasudeva (Director - Marketing), Shri Pushp Kumar Joshi (Director - Human Resources).

The Part-Time Ex-Officio Directors are Dr. S.C. Khuntia and Shri L.N. Gupta. The Part-Time Non Official (Independent) Directors are S/Shri Anil Razdan, S.K.Roongta, G.K. Pillai, A.C. Mahajan, Dr. G. Raghuram and Dr. Gitesh K. Shah.

The following are the details of Directors appointment / cessation:

- Dr.S.C. Khuntia, Additional Secretary & Financial Advisor, MOP & NG who joined HPCL Board on August 03, 2012 and Shri L.N. Gupta, Joint Secretary (Refineries), MOP&NG who joined HPCL Board on June 25, 2008 continues to be Ex-Officio Part-Time Directors of the Corporation.

- Shri Anil Razdan and Shri S.K. Roongta who have joined HPCL Board on 10th January, 2011 continue to be Part-Time Non Official Directors of the Corporation. S/Shri G.K.Pillai, A.C. Mahajan and G. Raghuram who have joined HPCL Board on 9th April, 2012 continue to be Part-Time Non Official Directors of the Corporation.

- Dr. Gitesh K. Shah, who joined HPCL Board on 7th December, 2009 ceased to be Part-Time Non-Official Director of the Corporation effective 6th December, 2012 on completion of his tenure of three years. MOP&NG vide letter No.C-31017/5/2012/CA dated 26th February, 2013 have reappointed Dr. Gitesh K. Shah as a Part-Time Non-Official Director on the Board of HPCL effective 26th February, 2013 and Dr. Gitesh K. Shah has been inducted in the Board effective this date.

- Shri S. Roy Choudhury (Chairman & Managing Director), Shri B. Mukherjee (Director - Finance), Shri K. Murali (Director - Refineries), Smt. Nishi Vasudeva (Director - Marketing) and Shri Pushp Kumar Joshi (Director - Human Resources) continue as Whole - Time Directors of the Corporation.

As per the provisions of Section 256 of the Companies Act 1956, Shri S.K. Roongta, Smt. Nishi Vasudeva, Shri Anil Razdan and Shri G K Pillai retires by rotation at the Next Annual General Meeting and are eligible for re-appointment.

ACKNOWLEDGEMENTS

The Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, Petroleum Planning & Analysis Cell and the State Governments.

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to our valued customers as well as for the overall performance of the Company.

The employees of the Company have continued to display their total commitment towards the pursuit of excellence. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Company to scale even greater heights.

Your Directors are thankful to the shareholders for their faith and continued support in the endeavors of the Company.

For and on behalf of the Board of Directors

S. ROY CHOUDHURY

Chairman & Managing Director

28th May, 2013

Mar 31, 2012

The behalf of the Board of Directors, I have great pleasure in presenting to you the sixtieth Annual Report on the working of the Company, together with the Audited Accounts for the year ended 31st March 2012.

HIGHLIGHTS

Rs./Crores

2011-12 2010-11

FINANCIAL

Sales/Income from Operation 1,88,130.95 1,42,396.49

Profit before Depreciation, Interest and Tax 5,071.40 4,636.75

Depreciation (1,712.93) (1,406.95)

Interest (2,139.23) (892.06)

Profit before Tax 1,219.24 2,337.74

Provision for Tax

Current Tax (396.65) (417.11)

Deferred Tax (6.94) (390.96)

Taxation of earlier years written back 95.78 (82.17)

MAT Credit Entitlement - 91.51

Profit after Tax 911.43 1,539.01

Balance brought forward from previous year 9,373.12 8,715.15

Appropriations:

General Reserve (91.14) (153.90)

Debenture Redemption Reserve (176.15) (176.15)

Proposed Dividend (287.83) (474.08)

Tax on distributed profits (46.70) (76.91)

Balance carried forward 9,682.74 9,373.12

PHYSICAL PERFORMANCE (MMT)

Market Sales (Including Exports) 29.48 27.03

Crude Thruput:

Mumbai Refinery 7.51 6.55

Visakh Refinery 8.68 8.20

SHAREHOLDERS'VALUER)

Earnings per Share 26.92 45.45

Cash Earnings per Share 77.70 98.58

Book Value per Share 387.52 370.49

DIVIDEND

Your Directors, after taking into account the financial results of the Company during the year, have recommended dividend of Rs. 8.50 per share for the year 2011-12 as against Rs. 14 per share paid for the year 2010-11. The dividend for 2011-12, including dividend tax provision will absorb Rs. 334.53 crores (2010-11: Rs. 550.99 crores).

SALES/INCOME FROM OPERATIONS

Your Company has achieved sales/income from operations of Rs. 1,88,130.95 crores as compared to Rs. 1,42,396.49 crores in 2010-11.

PROFIT

Your Company has earned gross profit of Rs. 5,071.40 crores as against Rs. 4,636.75 crores in 2010-11 and profit after tax of Rs. 911.43 crores as compared to Rs. 1,539.01 crores in 2010-11.

INTERNAL RESOURCES GENERATION

The Internal Resources generated were Rs. 2,179.48 crores as compared to Rs. 2,785.93 crores in 2010-11.

CONTRIBUTION TO EXCHEQUER

Your Company has contributed a sum of Rs. 31,300.53 crores to the exchequer by way of duties and taxes, as compared to Rs. 28,864.15 crores in 2010-11.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, your Directors state that:

(i) In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

(ii) The Company has 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 as on 31st March 2012 and Statement of Profit & Loss of the Company for the year ended on that date.

(iii) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) These Accounts have been prepared on a going concern basis.

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Corporation has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The performance of the Corporation of the year 2011-12 qualifies for "Excellent" rating basis self evaluation.

REFINERY PERFORMANCE

HPCL refineries processed a combined crude thruput of 16.19 MMT (14.75 MMT in 2010-11) with a capacity utilization of 109% of the installed capacity of 14.80 MMT.

The Combined Distillate yield of 73.2% was higher than MoU Excellent target of 73.0%.

HPCL refineries recorded the highest ever HS crude processing of 68.3%.

Gross refining margins of Mumbai Refinery averaged at US$ 2.83 per barrel as against US$ 4.65 per barrel for the year 2010-11.

Gross refining margins of Visakh Refinery averaged at US$ 2.95 per barrel as against US$ 5.81 per barrel for the year 2010-11.

Mumbai Refinery :

During the year, Mumbai Refinery achieved crude thruput of 7.51 MMT as against installed capacity of 6.50 MMT. The refinery has set a milestone by recording the highest ever crude thruput surpassing the previous best of 7.42 MMT during 2006-07.

The Distillate yield at 72.3% was higher than MoU Excellent target of 71.7%.

Mumbai Refinery achieved Specific Energy Consumption (MBTU/BBL/NRGF) of 81.4 against MoU Excellent target of 89.0 for the current year.

The fuel and loss for the year was 7.9% against the target of 8.2 %

Visakh Refinery :

Visakh Refinery achieved crude thruput of 8.68 MMT as against installed capacity of 8.30 MMT.

The Distillate yield at 74.0% was inline with the MoU Excellent target of 74.10%.

Visakh Refinery achieved Specific Energy Consumption (MBTU/BBL/NRGF) of 84.20 against MoU Excellent target of 88.0 for the current year.

The fuel and loss for the year was 7.4% against the target of 7.9 %.

The particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo are detailed in Annexure I.

The particulars relating to control of Pollution and other initiatives by Refineries are listed in Annexure II of Directors' Report.

MARKETING PERFORMANCE

During the year 2011-12, your Corporation achieved sales volume (including exports) of 29.48 million tonnes as against 27.03 million tonnes recorded in 2010-11. HPCL recorded a growth of 7.9% in Marketing Sales, over the sales volume of the previous year and amongst public sector oil companies increased its market share to 19.96% as on 31st March 2012 from 19.65% recorded in the previous year.

During the year, your Corporation commissioned 1,056 new retail outlets, which include 329 retail outlets in the rural areas taking the total tally to 11,253 Retail Outlets. Your Corporation increased its market share in MS and HSD (combined) by 0.55%, the highest gain in market share by HPCL during the last 26 years. In the LPG business line, enrolled 33.56 Lakhs new HP Gas customers taking their total to 362 lakh as on 31st March 2012. In order to provide LPG to rural India, your Corporation commissioned 218 distributors under the Rajiv Gandhi Gramin LPG Vitaran Yojana. In the Aviation Business line, your Corporation achieved the highest ever sales of 768 TMT during the year. A record thruput of 41 million tonnes was handled by POL installations and your Corporation's pipeline network achieved a thruput of 13.62 million tonnes during the year, exceeding the targeted thruput.

VIGILANCE

Vigilance Department has always striven to create an environment of proactive vigilance, to give importance to transparency, to adhere to professionalism and high standards in Customer Service and Project Execution.

On the occasion of Vigilance Awareness Week which was observed from 31st October 2011 to 5th November 2011 all over India in all the offices of HPCL, various competitions like slogan, quiz, essay writing contests etc. were organised for creating awareness amongst the employees. These competitions were also held in various schools and colleges all over India.

INDUSTRIAL RELATIONS

The Industrial Relations climate during the year 2011-12 continued to be harmonious across all locations. Long Term Settlement discussions were conducted for Marketing division and Mumbai & Visakh Refineries. A Settlement on Career Development Policy for Marketing division was signed with all-India Marketing Unions on 31st March 2012 before CLC (C), Delhi.

A total number of 31 Industrial Relations related workshops were held in the year 2011-12 against an MoU target of 24.

OFFICIAL LANGUAGE IMPLEMENTATION

Official Language Implementation has been given the utmost importance in the Corporation. The Corporation was awarded prestigious Indira Gandhi Rajbhasha Award for the fourth consecutive year by Home Ministry.

SC / ST LIAISON

The overall representation of SC / ST employees in the Corporation is 27.67%. During the year, your Corporation has carried out a number of Welfare / Development activities such as primary education, scholarships, drinking water facilities, health care, income generating schemes / vocational training, rehabilitation of persons with disabilities & other welfare activities.

CORPORATE GOVERNANCE

The Corporation has complied with the requirements of Corporate Governance as provided under Clause 49 of the Listing Agreement and DPE guidelines on Corporate Governance.

The detailed Corporate Governance Report forms part of this Annual Report separately.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A detailed Management Discussion and Analysis Report has been given separately.

PARTICULARS OF EMPLOYEES

A statement providing the information as required under Section 217 (2A) of the Companies Act, 1956 is annexed herewith (Annexure III). The details regarding the number of women employee's vis-a-vis the total number of employees in each group is also annexed. (Annexure IV).

FINANCIAL STATEMENTS OF SUBSIDIARIES

In accordance with the general exemption granted by the Ministry of Corporate Affairs, Government of India, the Annual Accounts and related information of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies.

COST AUDIT

The Cost Audit for the financial year 2010-11 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs before the stipulated date of filing.

DIRECTORS

HPCL Board presently comprises of 12 Directors. The Whole Time Directors are Shri S. Roy Choudhury, Chairman & Managing Director, Dr. V. Vizia Saradhi, Director - Human Resources, Shri B. Mukherjee, Director - Finance, Shri K. Murali, Director - Refineries and Smt. Nishi Vasudeva, Director - Marketing.

The Part-Time Directors are S/Shri L.N. Gupta, Dr. Gitesh K. Shah, Anil Razdan, S.K. Roongta, G.K. Pillai, AC. Mahajan and G. Raguram.

The following are the details of Directors appointment /cessation:-

- Shri PK. Sinha, Special Secretary and Financial Advisor, MOP & NG, who joined HPCL Board on March 01, 2006 ceased to be the Ex-Officio Part-Time Director of the Corporation effective March 01, 2012, consequent upon his appointment as Secretary, Ministry of Shipping, Government of India. The Board place on record its sincere appreciation to Shri PK. Sinha for the valuable services rendered by him during his tenure as Director of the Corporation.

Shri L.N. Gupta, Joint Secretary (Refineries), MOP & NG who joined HPCL Board on June 25, 2008 continues to be the Ex-Officio Part-Time Director of the Corporation.

- Dr. Gitesh K. Shah who joined HPCL Board on December 07, 2009 and Shri Anil Razdan and Shri S.K. Roongta who have joined HPCL Board on January 10, 2011 continue to be the Part-time Non-official Directors of the Corporation.

- S/Shri G.K. Pillai, A.C. Mahajan and G. Raghuram were appointed as Part-time Non-Official Directors of the Corporation effectiveApril09,2012.

- Smt. Nishi Vasudeva, Director (Marketing) was appointed as Whole-Time Director on HPCL Board effective July 04, 2011. Shri S. Roy Choudhury, (Chairman & Managing Director), Dr. V. Vizia Saradhi (Director - Human Resources), Shri B. Mukherjee (Director - Finance), and Shri K. Murali (Director - Refineries) continue as Whole Time Directors of the Corporation.

As per the provisions of Section 256 of the Companies Act, 1956 , Shri L.N. Gupta, Dr. Gitesh K. Shah, Shri B. Mukherjee and Shri Anil Razdan retire by rotation at the next Annual General Meeting and are eligible for re-appointment.

ACKNOWLEDGEMENTS

The Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, Petroleum Planning & Analysis Cell and the State Governments.

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to our valued customers as well as for the overall performance of the Company.

The employees of the Company have continued to display their total commitment towards the pursuit of excellence. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Company to scale even greater heights.

Your Directors are thankful to the shareholders for their faith and continued support in the endeavors of the Company.

For and on behalf of the Board of Directors

S. ROY CHOUDHURY

29th May 2012 Chairman & Managing Director

Mar 31, 2011

TO THE MEMBERS

On behalf of the Board of Directors, I have great pleasure in presenting to you the fifity ninth Annual Report on the working of the Company, together with the Audited Accounts for the year ended 31st March 2011.

HIGHLIGHTS

(Rs. Crores)

2010-11 2009-10 FINANCIAL

Sales/Income from Operations 1,42,396.49 1,14,888.63

Profit before Depreciation, Interest and Tax 4,637.09 4,193.18

Depreciation (1,406.95) (1,164.40)

Interest (884.00) (903.75)

Profit before Tax 2,346.14 2,125.03

Provision for Tax

- Current Tax (425.52) (561.50)

- Deferred Tax (390.96) (204.61)

- Taxation of earlier years written back (82.17) (57.51)

- MAT Credit Entitlement 91.51 -

- Fringe Benefit Tax - (0.05)

Profit after Tax 1,539.01 1,301.37

Balance brought forward from previous year 8,715.15 8,104.16

Appropriations:

General reserve (153.90) (130.14)

Debenture Redemption Reserve (176.15) (86.40)

Proposed Dividend (474.08) (406.35)

Tax on distributed Profits (76.91) (67.49)

Balance carried forward 9,373.12 8,715.15

PHYSICAL PERFORMANCE (MMT)

Market Sales (Including Exports) 27.03 26.27

Crude Thruput:

Mumbai Refinery 6.55 6.96

Visakh Refinery 8.20 8.80

SHAREHOLDERS' VALUE (Rupees)

Earnings per Share 45.45 38.43

Cash Earnings per Share 98.54 78.86

Book Value per Share 386.76 341.32

DIVIDEND

Your Directors, after taking into account the financial results of the Company during the year, have recommended dividend of Rs. 14 per share for the year 2010-11 as against Rs. 12 per share paid for the year 2009-10. The dividend for 2010-11, including dividend tax provision will absorb Rs. 550.99 crores (2009-10 : Rs. 473.84 crores).

SALES/INCOME FROM OPERATIONS

Your Company has achieved sales/income from operations of Rs. 1,42,396.49 crores as compared to Rs. 1,14,888.63 crores in 2009-10.

PROFIT

Your Company has earned gross Profit of Rs. 4,637.09 crores as against Rs. 4,193.18 crores in 2009-10 and Profit after tax of Rs. 1,539.01 crores as compared to Rs. 1,301.37 crores in 2009-10.

INTERNAL RESOURCES GENERATION

The Internal resources generated were Rs. 2,785.93 crores as compared to Rs. 2,196.53 crores in 2009-10.

CONTRIBUTION TO EXCHEQUER

Your Company has contributed a sum of Rs. 28,864.15 crores to the exchequer by way of duties and taxes, as compared to Rs. 21,156.02 crores in 2009-10.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, your Directors state that:

(i) In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation

relating to material departures. (ii) The Company has 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 as on 31st March 2011 and of the Profit & Loss Account of the company for the year ended on that date.

(iii) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) These Accounts have been prepared on a going concern basis.

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Corporation has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas. The performance of the Corporation of the year 2010-11 qualifies for "Excellent" rating basis self evaluation.

REFINERY PERFORMANCE

HPCL refineries processed a combined thruput of 14.75 MMT (15.76 MMT in 2009-10) against combined installed capacity of 14.80 MMT.

HPCL refineries achieved overall MOU Very Good Rating with respect to production parameters viz. Crude thruput, Distillate Yields and Specific Energy Consumption.

Gross Refining margins of Mumbai Refinery averaged at US$ 4.65 per barrel as against US$ 2.80 per barrel for the year 2009-10.

Gross Refining margins of Visakh Refinery averaged at US$ 5.81 per barrel as against US$ 2.59 per barrel for the year 2009-10.

Mumbai Refinery:

During the year, Mumbai Refinery achieved crude thruput of 6.55 MMT as against installed capacity of 6.50 MMT.

The fuel and loss of 7.6 wt% for the year was lower than Annual Plan of 8.8%the year.

The Adjusted Distillate yield at 72.4% was higher than MoU Excellent target of 70%.

Mumbai Refinery achieved Specific Energy Consumption (MBTU/BBL/NRGF) of 91.1 against MoU Excellent target of 97.0 for the current year.

Visakh Refinery :

During the year, Visakh Refinery achieved crude thruput of 8.20 MMT as against installed capacity of 8.3 MMT.

The fuel and loss of 7.3 wt% for the year was lower than Annual Plan of 7.7 %.

The Adjusted Distillate yield at 71.5% was higher than MoU Excellent target of 70%.

Visakh Refinery achieved Specific Energy Consumption (MBTU/BBL/NRGF) of 86.3 against MoU Excellent target of 90.0 for the current year.

The particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo are detailed in Annexure I.

The particulars relating to control of Pollution and other initiatives by refineries are listed in Annexure II of Directors' report.

MARKETING PERFORMANCE

The market sales (including exports) were 27.03 million tonnes as against 26.27 million tonnes recorded in 2009-10.

VIGILANCE

Vigilance Department in the current year has strived to emphasize in its activities, an environment of proactive vigilance, the importance of transparency, adherence to professionalism and high standards in customer service and project execution.

Vigilance Awareness Week was observed from 25.10.2010 to 01.11.2010 all over India, wherein, various competitions like slogan, quiz, essay writing contests etc. were organized among the employees.

INDUSTRIAL RELATIONS

Industrial Relations climate during the year 2010-11 continued to be harmonious across all locations.

The Competency Mapping and Development process was further strengthened.

During the year, Organisation wide culture survey-Darpan 2010 was administered for all management employees as an endeavour towards building high performance culture.

Further, Employee Self Contributory Death Relief Scheme was introduced. Under this scheme, employees voluntarily make a one-time contribution of Rs. 50/- per death. The amount collected is paid to the Beneficiary nominated while in service.

OFFICIAL LANGUAGE IMPLEMENTATION

Official Language Implementation has been given the utmost importance in the Corporation.

SC / ST LIAISON

The overall representation of SC / ST employees in the Corporation is 27.73%. During the year, your Corporation has carried out a number of Welfare / Development activities such as primary education, scholarships, drinking water facilities, health care, income generating schemes / vocational training, rehabilitation of persons with disabilities & other welfare activities.

CORPORATE GOVERNANCE

The Corporation has complied with the requirements of Corporate Governance with the exception of appointment of Independent Directors to the level of 50% of the total strength of the Board. This matter is being pursued with the Administrative Ministry. The detailed Corporate Governance report forms part of this Annual report separately.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A detailed Management Discussion and Analysis Report has been given separately.

PARTICULARS OF EMPLOYEES

A statement providing the information as required under Section 217 (2A) of the Companies Act, 1956 is annexed herewith (Annexure III). The details regarding the number of women employee's vis-ÃÂ -vis the total number of employees in each group is also annexed. (Annexure IV).

CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARIES

In accordance with the general exemption granted by the Ministry of Corporate Affairs, Governemt of India, the Annual Accounts and related information of the subsidiary companies are not being attached with the Balance Sheet of the Company. The company will make available the Annual Accounts of the Subsidiary companies and the related detailed information to any member of the company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the registered Office of the company and that of the respective subsidiary companies.

COST AUDIT

The cost audit for the financial year 2009-10 was carried out and the Cost Audit Reports were fled with the Ministry of Corporate Affairs on September 24, 2010 as against the due date for fling of September 28, 2010.

DIRECTORS

HPCL Board presently comprises of 9 Directors. The Whole Time Directors are S/Shri S. Roy Choudhury, Chairman & Managing Director, Dr. V. Vizia Saradhi, Director-Human Resources, B. Mukherjee, Director-Finance and K. Murali, Director-refineries.

The Part-time Directors are S/Shri P.K. Sinha, L.N. Gupta, Dr. Gitesh K. Shah, Anil Razdan and S.K. Roongta. The following are the details of their appointment:-

- Shri P.K. Sinha, Special Secretary and Financial Adviser, MOP&NG who joined HPCL Board on March 1, 2006 continues to be the Ex-Officio Part-time Director of the Corporation. Shri L.N. Gupta, Joint Secretary (refineries), MOP&NG who joined HPCL Board on June 25, 2008 continues to be the Ex-Officio Part-time Director of the Corporation.

- Dr. Gitesh K. Shah, joined HPCL Board as a Part-time Non-Official Director on December 7, 2009. S/Shri Anil Razdan and S.K. Roongta have joined HPCL Board as Part-time Non-Official Directors on January 10, 2011. Shri P.V. Rajaraman and Prof. P.G. Apte, who joined HPCL Board on July 22, 2007, as Part-Time Non-Official Directors have ceased to be the Directors of the Corporation on completion of their tenure effective July 19, 2010.

- Shri S. Roy Choudhury, Director (Marketing) was appointed as Chairman and Managing Director effective August 1, 2010. S/Shri Dr. V. Vizia Saradhi (Director-Human Resources), B. Mukherjee (Director-Finance) and K. Murali (Director-refineries) continue as whole Time Directors of the Corporation.

- Shri Arun Balakrishnan, Chairman and Managing Director, retired from the services of the Corporation effective July 31, 2010 on attaining the age of superannuation. The Board placed on records its sincere appreciation to Shri Balakrishnan for the valuable services rendered by him during his tenure as C&MD of the Corporation.

As per the provisions of Section 256 of the Companies Act, 1956, Dr. V. Vizia Saradhi & Shri K. Murali, retire by rotation at next Annual General Meeting and are eligible for re-appointment.

ACKNOWLEDGEMENTS

The Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, Petroleum Planning & Analysis Cell and the State Governments.

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to our valued customers as well as for the overall performance of the Company.

The employees of the Company have continued to display their total commitment towards the pursuit of excellence. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Company to scale even greater heights.

Your Directors are thankful to the shareholders for their faith and continued support in the endeavors of the Company.

For and on behalf of the Board of Directors

S. ROY CHOUDHURY

Chairman & Managing Director

May 26, 2011

Mar 31, 2010

On behalf of the Board of Directors, I have great pleasure in presenting to you the fifty eighth Annual Report on the working of the Company, together with the Audited Accounts for the year ended 31st March 2010.

HIGHLIGHTS

(Rs. Crores)

2009-10 2008-09 FINANCIAL

Sales/Income from Operations 1,14,888.63 1,31,802.65

Profit before Depreciation, Interest and Tax 4,193.18 3,776.36

Depreciation (1,164.40) (981.29)

Interest (903.75) (2,082.84)

Profit before Tax 2,125.03 712.23

Provision for Tax

- Current Tax (561.50) (227.60)

- Deferred Tax (204.61) (34.29)

- Taxation of earlier years written back (57.51) 111.77

- Deferred Tax written back - 26.90

- Fringe Benefit Tax (0.05) (14.03)

Profit after Tax 1,301.37 574.98

Balance brought forward from previous year 8,104.16 7,794.67 Appropriations:

General Reserve (130.14) (57.50)

Debenture Redemption Reserve (86.40) -

Proposed Dividend (406.35) (177.78)

Tax on distributed profits (67.49) (30.21)

Balance carried forward 8715.15 8,104.16

PHYSICAL PERFORMANCE (MMT)

Market Sales (Including exports) 26.27 25.39

Crude Thruput:

Mumbai Refinery 6.96 6.65

Visakh Refinery 8.80 9.16 SHAREHOLDERSÃ VALUE (Rupees)

Earnings per Share 38.43 16.98

Cash Earnings per Share 78.86 46.97

Book Value per Share 341.32 316.88

DIVIDEND

Your Directors, after taking into account the financial results of the Company during the year, have recommended dividend of Rs. 12 per share for the year 2009-10 as against Rs. 5.25 per share paid for the year 2008-09. The dividend for 2009-10, including dividend tax provision will absorb Rs. 473.84 crores (2008-09: Rs. 207.99 crores).

SALES/INCOME FROM OPERATIONS

Your Company has achieved sales/income from operations of Rs. 1,14,888.63 crores as compared to Rs.1,31,802.65 crores in 2008-09.

PROFIT

Your Company has earned gross profit of Rs. 4,193.18 crores as against Rs. 3,776.36 crores in 2008-09 and profit after tax of Rs. 1,301.37 crores as compared to Rs. 574.98 crores in 2008-09.

INTERNAL RESOURCES GENERATION

The Internal Resources generated were Rs. 2,196.53 crores as compared to Rs. 1,382.56 crores in 2008-09.

CONTRIBUTION TO EXCHEQUER

Your Company has contributed a sum of Rs. 21,156.02 crores to the exchequer by way of duties and taxes, as compared to Rs. 21,359.75 crores in 2008-09.

DIRECTORSÃ RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, your Directors state that:

(i) In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

(ii) The Company has 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 as on 31st March 2010 and of the Profit & Loss Account of the company for the year ended on that date.

(iii) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) These Accounts have been prepared on a going concern basis.

MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA

Your Corporation has been signing a Memorandum of Understanding (MOU) with the Ministry of Petroleum & Natural Gas.

The performance of the Corporation of the year 2009-10 qualifies for "Excellent" rating basis self evaluation.

REFINERY PERFORMANCE

HPCL refineries processed a combined thruput of 15.76 MMT (15.81 MMT in 2008-09) against combined installed capacity of 14.0 MMT by achieving 113% capacity utilization.

HPCL refineries achieved overall MOU Excellent Rating with respect to production parameters viz. Crude thruput, Distillate Yields and Specific Energy Consumption.

HPCL Refineries commissioned Clean Fuels Projects and Euro-IV MS production started prior to January 2010 as per Auto Fuels Policy.

Gross refining margins of Mumbai Refinery averaged at US$ 2.80 per Parrel as against US$ 6.11 per barrel for the year 2008-09.

Gross refining margins of Visakh Refinery averaged at US$ 2.59 per barrel as against US$ 2.42 per barrel for the year 2008-09.

Mumbai Refinery:

During the year, Mumbai Refinery achieved crude thruput of 6.96 million tonnes as against 6.65 million tonnes achieved for the year 2008-09. This crude thruput was higher than MOU target of 6.5 MMT. The capacity utilisation was 107%.

The Fuel and Loss at Mumbai Refinery was 7.64% during the year which is higher than last year of 6.64% on account of commissioning new Green Fuel Emission Control Project.

Total Distillate yield (Adjusted for crude mix and Bitumen) at 71.8% was higher than MOU Excellent target of 68.6%.

Mumbai Refinery achieved the lowest ever Specific Energy Consumption (MBN) of 88.7 against MOU target of 98.0 for the current year.

Naphtha was replaced with eco-friendly RLNG in Captive power plant to reduce own power generation cost to the tune of Rs. 260 crores/annum.

Mumbai Refinery was the First Indian PSU refinery to commence BS-IV MS production facilities and first batch of BS-IV MS was rolled out in January, 2010. In its continual effort to widen the crude basket, Mumbai Refinery processed 2 new crudes, namely Iran Mix and Ravva crude.

During 2009-10, total 555 TMT Iran Mix and 107 TMT Ravva crude were processed.

In its endeavor to maximize profitability, Mumbai Refinery has processed more of heavier crudes like Basrah and Kuwait by modifying CDU-I bottom section with high capacity "Flexitrays" during November, 2009.

Visakh Refinery :

During the year, Visakh Refinery achieved crude thruput of 8.80 million tonnes as against 9.16 million tonnes achieved for the year 2008-09. This crude thruput was lower than MOU target of 9.1 MMT. The capacity utilisation was 117.3%.

The Fuel and Loss at Visakh Refinery was 6.77% during the year which is higher than last year of 5.69% on account of commissioning new Clean Fuels Project.

Total Distillate yield (Adjusted for crude mix and Bitumen) at 73.5% is in line with MOU Excellent target.

Visakh Refinery achieved Specific Energy Consumption (MBN) of 91 against MOU target of 93 during the year.

In order to maximize profitability, Visakh Refinery processed high viscous and high resid yielding new crude called Sooroosh Crude blended with IRAN Light. The refinery also processed high TAN Escravos blended crude.

Bitumen coastal loading facility was commissioned and 17 TMT was exported during the year. The particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earning & Outgo are detailed in Annexure I.

Similarly, particulars relating to control of Pollution and other initiatives by Refineries are listed in Annexure II of DirectorsÃ Report.

MARKETING PERFORMANCE

The market sales (including exports) were 26.27 million tonnes as against 25.39 million tonnes recorded in 2008-09.

VIGILANCE

Vigilance Department in the current year has strived to emphasize in its activities, an environment of proactive vigilance, the importance of transparency, adherence to professionalism and high standards in customer service and project execution.

Vigilance Awareness Week was observed from 03.11.2009 to 07.11.2009 all over India, wherein, various competitions like slogan, quiz, essay writing contests etc were organized among the employees.

INDUSTRIAL RELATIONS

Industrial Relations climate during the year 2009-10 continued to be harmonious across all locations.

The Competency Mapping and Development process was strengthened. 725 Officers attended Development Centers and Individual Development Plans were drawn up and progress reviewed. Technical Competency Framework was developed for the Exploration & Production business unit.

During the year, Gaurav awards were introduced to identify and recognize outstanding performance by Non-Management Employees.

To enhance corporate governance, Whistle Blower Policy was adopted. Conduct, Discipline & Appeal Rules applicable to

Management Employees were also reviewed and amended.

OFFICIAL LANGUAGE IMPLEMENTATION

Official Language Implementation continued to receive utmost importance in the Corporation.

SC / ST LIAISON

The overall representation of SC / ST employees in the Corporation is 27.69%. During the year, your Corporation has carried out a number of Welfare / Development activities such as primary education, scholarships, drinking water facilities, health care, income generating schemes / vocational training, rehabilitation of persons with disabilities & other welfare activities.

CORPORATE GOVERNANCE

The Corporation has complied with the requirements of Corporate Governance with the exception of appointment of Independent Directors to the level of 50% of the total strength of the Board. This matter is being pursued with the administrative Ministry and is under their active consideration. The details in this regard form part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

This report has been given separately.

PARTICULARS OF EMPLOYEES

A statement providing the information as required under Section 217 (2A) of the Companies Act, 1956 is annexed herewith (Annexure III). The details regarding the number of women employeeÃs vis-ÃÂ -vis the total number of employees in each group is also annexed (Annexure IV).

DIRECTORS

HPCL Board presently comprised of 10 Directors. The whole time Directors are S/Shri Arun Balakrishnan, Chairman & Managing Director, S. Roy Choudhury, Director-Marketing, V. Viziasaradhi, Director-Human Resources, B. Mukherjee, Director-Finance and K. Murali, Director-Refineries.

The Part-time directors are S/Shri P.K. Sinha, L.N. Gupta, P.V. Rajaraman, Prof. Prakash G. Apte and Dr. Gitesh K. Shah.

The following are the details of their appointment:-

- Shri P.K. Sinha, Additional Secretary and Financial Adviser, MOP&NG who joined HPCL Board on March 1, 2006 continues to be the Ex-Officio Part-time Director of the Corporation. Shri L.N. Gupta, Joint Secretary (Refineries), MOP & NG who joined HPCL Board on June 25, 2008 continues to be the Ex-Officio Part-time Director of the Corporation.

- Dr. Gitesh K. Shah, joined HPCL Board as a Part-time Non-Official Director on December 7, 2009. S/Shri P.V. Rajaraman and Prof. P.G. Apte who joined HPCL Board on July 22, 2007 continue to be the Non-Official Directors of the Corporation.

- S/Shri Arun Balakrishnan (Chairman & Managing Director), S. Roy Choudhury (Director-Marketing), V. Viziasaradhi (Director-Human Resources), B. Mukherjee (Director-Finance) and K. Murali (Director - Refineries) continue as whole Time Directors of the Corporation.

As per the provisions of Section 256 of the Companies Act, 1956, S/Shri A.K. Sinha, L.N. Gupta and B. Mukherjee who retire by rotation at next Annual General Meeting and are eligible for reappointment.

ACKNOWLEDGEMENTS

The Directors gratefully acknowledge the valuable guidance and support extended by the Government of India, Ministry of Petroleum and Natural Gas, other Ministries, Petroleum Planning & Analysis Cell and the State Governments.

The Directors also acknowledge the contribution made by the large number of dealers and distributors spread all over the country towards improving the service to our valued customers as well as for the overall performance of the Company. The employees of the Company have continued to display their total commitment towards the pursuit of excellence. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made by the employees and look forward to their services with zeal and dedication in the years ahead to enable the Company to scale even greater heights.

Your Directors are thankful to the shareholders for their faith and continued support in the endeavors of the Company.

For and on behalf of the Board of Directors

ARUN BALAKRISHNAN Chairman & Managing Director

May 26, 2010

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article