Home  »  Company  »  Hind. Petrol  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Hindustan Petroleum Corporation Ltd.

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 "àoaUm" (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-à-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 – Bhopal – Bhilwara – 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-à-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-à-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 SHAREHOLDERS’ 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.

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 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 Directors’ 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 employee’s vis-à-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