Home  »  Company  »  Indian Oil Corp  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Indian Oil Corporation Ltd.

Mar 31, 2015

Dear Members,

The behalf of the Board of Directors, it is my privilege to present the 56th Annual Report of the Corporation for the financial year ended 31st March, 2015, along with the Audited Financial Statement, Auditors'' Report and the Report of the Comptroller & Auditor General of India on the Accounts.

PERFORMANCE REVIEW FINANCIAL

2014-15 2013-14

US$ Million Rs. in Crore US$ Million Rs. in Crore

Turnover

(inclusive of Excise Duty & Sale of Services) 73,701 450,756 75,669 457,571

EBITDA

(Profit Before Exceptional Items, Finance Cost, Tax, 2,337 14,291 3,146 19,023 Depreciation & Amortisation)

Finance Cost 562 3,435 840 5,084

Depreciation 741 4,529 953 5,760

Profit Before Tax & Exceptional Items 1,034 6,327 1,353 8,179

Exceptional Items 273 1,668 288 1,747

Profit Before Tax 1,307 7,995 1,641 9,926

Tax Provision 445 2,722 480 2,907

Profit After Tax 862 5,273 1,161 7,019

Balance Brought Forward from Last Year - - 399 2,174

Less: Appropriations

Proposed Dividend 262 1,602 349 2,112

Corporate Dividend Tax 53 326 59 359

Insurance Reserve (Net) 3 19 3 20

Bond Redemption Reserve 113 693 258 1,558

CSR Reserve (Net) - (1) (3) (17)

General Reserve 431 2,632 894 5,161

Balance Carried to Next Year - - - -

SHARE VALUE

2014-15 2013-14

US$ Rs. US$ Rs.

Cash Earnings Per Share 0.66 40.37 0.87 52.63

Earnings Per Share 0.36 21.72 0.48 28.91

Book Value Per Share 4.48 279.95 4.54 271.80

Note: Exchange Rate used:-

For 2014-15: Average Rate 1 US$ = Rs.61.16 and Closing Rate 1 US$ = Rs.62.51 as on 31.03.2015

For 2013-14: Average Rate 1 US$ = Rs.60.47 and Closing Rate 1 US$ = Rs.59.92 as on 31.03.2014

PHYSICAL

Million Tonnes

2014-15 2013-14

Refineries Throughput 53.59 53.13

Pipelines Throughput 75.68 73.07

Product Sales (inclusive of Gas, Petrochemicals & Exports) 76.51 75.53

DIVIDEND

The Board of Directors of your Corporation has recommended a dividend of 66 per cent, i.e., Rs. 6.60 per equity share of Rs.10/- each, on the paid-up Share Capital as against Rs. 8.70 per share declared in the previous year. This is the 48th consecutive year for which your Corporation has recommended payment of dividend. So far, your Corporation has paid a cumulative dividend of Rs. 25,713 crore, excluding the dividend of Rs. 1,602 crore payable for the current year, subject to approval by members. The dividend shall be paid to the members whose names appear in the Register of Members as well as the Beneficial Ownership Position provided by NSDL/CDSL as at the close of 7th September, 2015.

CONTRIBUTION TO EXCHEQUER

Your Corporation has consistently been the largest contributor to the national exchequer in the form of duties and taxes. During the year 2014-15, Rs. 98,326 crore was paid to the exchequer as against Rs. 86,164 crore paid in the previous year. An amount of Rs. 36,190 crore was paid to the Central Exchequer and Rs. 62,136 crore to the State Exchequers as against Rs. 27,293 crore and Rs. 58,871 crore paid in the previous year to the Central and State Exchequers respectively.

CONSOLIDATED FINANCIAL STATEMENTS

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

2014-15 2013-14

(US $ million) (Rs. in crore) (US $ million) (Rs. in crore)

Turnover (inclusive of Excise Duty & Sale of Services) 76,652 4,68,805 78,943 4,77,369

Profit Before Tax 1,147 7,014 1,650 9,978

Profit After Tax 797 4,872 1,152 6,967

Less: Share of Minority (6) (40) (20) (119)

Profit for the Group 803 4,912 1,172 7,086

Note: Exchange Rate used:

For 2014-15: Average Rate 1 US$ = Rs.61.16

For 2013-14: Average Rate 1 US$ = Rs.60.47

MoU PERFORMANCE

The Memorandum of Understanding (MoU) of your Corporation with the Government of India, setting the performance parameters for the year 2014- 15, was signed by the Chairman, IndianOil, and the Secretary (P&NG), Govt. of India, on 28th March, 2014. The thrust was broadly on the long-term perspective, while at the same time covering all the critical operations of the Corporation. Despite various challenges during the year, the Corporation has been able to meet the MoU targets under various parameters as per the MoU with the Government. The Corporation has consistently maintained "Excellent" MoU performance over the years. The performance rating for 2014-15 MoU is yet to be finalised by the Government.

INTERNATIONAL TRADE

Your Corporation imported 43.919 million tonnes of crude oil valued at Rs. 1,65,065 crore during the year, as against 42.55 million tonnes valued at Rs. 2,02,492 crore in the previous year, to meet its crude oil requirements through a carefully selected and diversified mix of supply sources. The import of petroleum products during the year was 4.908 million tonnes, valued at Rs. 22,623 crore, as against 3.74 million tonnes valued at Rs. 21,414 crore in the previous year. The Corporation also exported petroleum and petrochemical products worth Rs. 15,668 crore during the year as against Rs. 21,525 crore in the previous year. The reduction in exports is mainly due to decrease in international prices and absorption of products in the domestic market.

OPERATIONAL PERFORMANCE

Refineries

IndianOil refineries together achieved a crude oil throughput of 53.59 million tonnes during the year 2014-15 with a capacity utilisation of 98.9 per cent, as against a throughput of 53.13 million tonnes during the previous year. They achieved the best ever combined distillate yield of 78.8 wt% during the year as against the previous best of 78.1 wt% achieved during 2012-13 & 2013-14. With focussed efforts towards energy conservation, the refineries achieved the best ever overall specific energy consumption at 54.4 MBN1 against the previous best of 55.8 MBN achieved during 2013-14.

During the year, 14 new crudes, including high-TAN crudes, have been processed for the first time in the Corporation''s various refineries in an attempt to widen the crude basket and to tie up new crude sources as a measure for de-risking.

Pipelines

The pipelines network of the Corporation performed exceedingly well during the year, achieving the highest-ever pipelines throughput of 75.68 million tonnes as against the throughput of 73.07 million tonnes in 2013-14. The crude oil pipelines achieved the highest-ever throughput of 47.78 million tonnes, with a capacity utilisation of 118%, during the year as against the throughput of 45.86 million tonnes, during the previous year. The product pipelines achieved a throughput of 27.90 million tonnes during the year as against the throughput of 27.21 million tonnes achieved in the previous year. The gas pipeline too achieved the highest-ever throughput of 1,364 MMSCM, surpassing the previous best throughput of 1,168 MMSCM registered in 2013-14. The total length of the pipeline network for crude oil, product and gas pipelines as on 31st March, 2015, was 11,221 km.

Marketing

Your Corporation continued to dominate the domestic market in core product categories, i.e. petrol, diesel and LPG, by selling 68.47 million tonnes of petroleum products (excluding naphtha for own use) during the year, as against 67.14 million metric tonnes during the previous year. During the year, your Corporation led from the front in implementing far-reaching policy changes such as diesel deregulation, Direct Benefit Transfer for LPG (DBTL), launch of 5-kg subsidised LPG cylinders across the country, extension of availability of BS-IV fuels to 24 more cities, etc.

To maintain its leadership position in the market place, your Corporation commissioned 947 retail outlets (fuel stations, including 369 Kisan Seva Kendra outlets in rural areas) during the year, raising their total number to 24,405. The contribution of KSK outlets to total sales during the year reached a new high of 12.9 per cent in Petrol (Retail) and 12.8 per cent in Diesel (Retail). 1,610 retail outlets were fully automated during the year, taking the total number of automated retail outlets to 7,687. The concept of NANF (No Automation, No Fuelling) was extended to over 1,270 more retail outlets during the year. The city-specific automation programme was implemented in retail outlets of 25 cities during the year, taking the total number of such cities to 29. Your Corporation supports the use of alternative energy, and as on 31 March, 2015, 2,663 of its retail outlets operate on solar energy.

IndianOil maintained its market share in the LPG segment during the year by releasing new connections, augmenting its bottling and storage capacities, and expanding its distributorship network, especially in rural areas. 72.6 lakh new domestic LPG connections were released, raising the Indane customer strength to 887.6 lakh. 250 regular LPG distributorships and 678 RGGLV (Rajiv Gandhi Gramin LPG Vitaran Yojana) distributorships for rural towns were commissioned during the year to further expand the network.

The modified DBTL scheme named PaHaL was rolled out initially in 54 districts on 15 Nov. 2014 and thereafter on ''pan-India'' basis from 1 Jan. 2015. With the percentage of cash-transfer-compliant Indane LPG customers touching 82 per cent, Rs. 2,360 crore was directly transferred to the customers'' accounts as permanent advance and Rs. 2,324 crore as subsidy. During the year, 5-kg free- trade LPG (FTL) cylinders were made available in 115 cities, enabling the Corporation to enrol 15,975 new customers and sell 29,054 refills. Your Corporation has signed an MoU with M/s. Sahaj e-Village Ltd. for selling 5-kg FTL Indane cylinders through their common service centres in the States of Assam, Bihar, Odisha, Tamil Nadu, Uttar Pradesh and West Bengal. Sahaj, which has more than 27,000 common service centres located in remote locations in the six States, reaches out to a rural consumer base of more than 27 crores.

IndianOil''s finished lube sales registered a growth of 0.6 per cent over the previous year and institutional lube sales registered a growth of 1.9 per cent. Eighteen new lubricant formulations were developed during 2014-15. Of these, seven products have already been commercialised, accounting for 1,000 metric tonnes in terms of sales and an approximate foreign exchange savings of US$ 11 Million.

IndianOil''s Aviation Service maintained its leadership position during the year with market share of 63.6 per cent.

Research & Development

During the year, your Corporation''s R&D Centre at Faridabad took a quantum leap in developing its intellectual assets. The Centre filed a record number of 92 patents – 13 in India, 20 in USA and 59 in other countries, while 14 patents were granted. The patent portfolio expanded this year to 384, with 83 US patents, 151 Indian patents and 150 patents of other countries. In addition, 125 product formulations were also developed. Significant advancements were also made in demonstration and commercialisation of indigenously developed technologies in refining area.

During the year, the R&D Centre, together with Mathura Refinery, prepared a basic design and engineering package for a 55-KTA Octamax unit based on in- house developed technology for production of high-octane gasoline component from FCCU C4 stream. Detailed engineering activities of INDADeptG unit at Guwahati Refinery are in progress for installation of a demonstration unit to meet <10 ppm Sulphur in MS pool based on in-house technology. Revamp of existing 0.6 MMTPA Coker-A unit at Barauni jointly with EIL is being carried out, which involves major activities such as change of coke drums, medication of heater/fractionators/coke yard, change of pumps, etc., that are similar to licencing a grassroots unit.

During the year, a new product ''Indane Nanocut'' was developed by the Centre, which will give a huge boost to the use of LPG in the metal-cutting segment as a superior product. The product will be marketed through the extensive network of Indane LPG distributors across India.

A cooperation agreement has been signed with Lummus Technology Inc, USA (a CB&I Company) for global marketing and licencing of IndMax technology. An MoU was also signed between IndianOil and Albemarle for supply of IndMax catalyst to IndMax licencees.

The product technologies, which predominantly include lubricant formulations, are adopted and marketed by the Corporation under the brand name SERVO. The refinery process technologies are licenced to identified engineering par tners, who in turn market the same with pre-agreed licence and royalty-sharing formula. The refinery catalysts and additive technologies are licenced and outsourced for manufacturing and supplying to various IndianOil and non- IndianOil refineries at agreed commercial terms.

Assam Oil and IBP

The Assam Oil Division (AOD) continued to play a vital role in ensuring supply of petroleum products in the northeast region. The Digboi Refinery processed 0.59 million tonnes of crude oil during the year.

During the year, the Explosives and Cryogenics businesses of IBP Division continued with excellent performance and recorded the highest ever production and sales of explosives and cryocans. The Explosives group manufactured and sold 1,00,071 metric tonnes of explosives during the year, recording a growth of 17.37 per cent over the previous year''s volume of 85,264 metric tonnes. The Cryogenics group sold 24,153 units of cryocans during 2014-15, recording 1.6 per cent growth over the previous year''s sale of 23,747 units.

EXPANDING BUSINESS

INTEGRATION & DIVERSIFICATION

Integration and diversification beyond domestic petroleum downstream sector has been a major thrust area for the Corporation for over a decade now. The Corporation has made significant investments in these areas, and efforts in this direction have started yielding results. Your Corporation envisages a larger presence with greater contribution from these segments to its turnover and profit growth.

Petrochemicals

During the year, the petrochemicals sales, including exports, touched a new high with sales of 2.49 million tonnes, against 2.12 million tonnes during the previous year, posting a growth of 17 per cent on year-on-year basis. The Petrochemical business has contributed significantly to the profits of the Company. Polymers, the largest segment of the Corporation''s petrochemicals business, recorded sales of 1.23 million tonnes in the domestic market, posting a 25 per cent year-on-year growth. Polymer products portfolio has grown to 48 grades in the domestic market, covering over 90 per cent of the user industry applications.

The Corporation''s state-of-the-art Product Application & Development Centre (PADC) located at Panipat has been developing new grades benchmarked against national and international products to meet customers'' needs. Five new PP/PE Improved/High Performance Grades were launched during the year.

The Corporation has emerged as a major supplier of polymer products to leading multinationals and currently has 89 OEM (Original Equipment Manufacturer) approvals, out of which 30 were obtained during the year. The Corporation exports petrochemicals under the PROPEL brand to 70 countries.

Gas

Your Corporation has been working towards expansion of its natural gas (LNG / RLNG / CNG) business by investing across the gas value chain and envisages greater presence in future.

During the year, the Corporation registered gas sales of 1.81 million tonnes against 1.94 million tonnes in the previous year. The lower sales was mainly due to the steep increase in the long-term LNG price vis-a-vis the international spot LNG prices since November 2014. LNG sales through the Corporation''s unique ''LNG at the Doorstep'' initiative also fell to 0.023 MMT from 0.030 MMT in 2013-14 on account of higher long-term LNG price and availability of alternative fuels at lower prices.

The Corporation is implementing a 5-MMTPA LNG import, storage and re- gassification terminal at Kamarajar Port (Ennore) near Chennai at a cost of Rs. 5,151 crore through a joint venture company (JVC). The terminal is targeted for completion in 2018 and pre-project activities are progressing on schedule.

The Corporation has been participating in the building of City Gas Distribution (CGD) infrastructure in the country. For this purpose, the Corporation had some time back formed two JVCs, namely, M/s. Green Gas Limited (GGL) and M/s. IndianOil-Adani Gas Private Limited (IOAGL). Currently, GGL operates two CGD networks, one each at Lucknow and Agra. IOAGL is implementing laying of CGD network in Chandigarh and Allahabad geographical areas and has also been authorised to develop CGD in Panipat, Daman and Ernakulam by PNGRB.

The Corporation has also been working on scaling up the cross-country gas pipeline infrastructure in the country. It had earlier formed two JVCs, viz., GSPL India Gasnet Ltd. and GSPL India Transco Ltd., for implementing the Mehsana- Bhatinda pipeline, the Bhatinda-Jammu-Srinagar pipeline and the Mallavaram- Bhopal-Bhilwara-Vijaipur pipeline respectively.

Exploration & Production (E&P)

Significant headway has been made in the Corporation''s drive to build its E&P portfolio, which now consists of participating interests in 10 domestic and seven overseas active assets.

The Corporation has three producing assets, viz., Niobrara Shale Project (USA), Pacific Northwest LNG Project (Canada) and Carabobo Project (Venezuela). During the year, the production from these assets increased to 3,299 mboe (million barrels oil equivalent) from 1,754 mboe in 2013-14, registering an 88 per cent rise. The proved and proved-developed reserves have increased from 1.66 mtoe (million tonnes oil equivalent) as on 31st March, 2014 to 2.18 mtoe as on 31st March, 2015, an increase of 32 per cent.

The cumulative total investment in the domestic assets stands at US$ 353.80 Million (equivalent to Rs. 1849.63 crore), and a sum of US$ 1,572.98 Million (equivalent to Rs.9200.37 crore) has been invested in overseas projects.

During the year, the Corporation had two discoveries in Gujarat-Kutch offshore blocks, GK-OSN-2009/1 & GK-OSN-2009/2, and the plan of development of the Assam block, AAP-ON-94/1, has been approved. Additionally, during the year, a major milestone was reached as the development and production phase of the two CBM blocks in Jharkhand (BK-CBM-2001/1 and NK-CBM-2001/1) began after sustained gas flow from the test wells in both the blocks.

Alternative Energy

During the year, your Corporation added 6.3 MW wind-power in Andhra Pradesh; thereby expanding the renewable energy portfolio to 74.3 MW, which includes wind energy capacity of 69.3 MW and solar energy capacity of 5 MW. Plans are afoot for completion of a 4-MW solar power project at Narimanam marketing terminal in Tamil Nadu for captive consumption.

Sustainable Development

Minimising carbon, water and waste footprint are the three pillars of the Corporation''s sustainability agenda. During the year, your Corporation added close to 4.8 MW of renewable energy through solarisation of its retail outlets, installation and office buildings; planted over 50,000 trees; held 17 carbon- neutral events; improved ground-water table by harvesting 2,700 tkl water through 437 Rainwater Harvesting systems and recycled 11.5 Tonnes of waste paper. Further, during the year the footprint accounting exercise was taken to a new level. Through an IT enabled data collection portal for the first time Carbon & Water Foot printing of all locations within the Corporation was implemented.

The Corporation''s Sustainability Report 2013-14 in e-version as well as an abridged printed version were released on 31st October, 2014. This report is in compliance with the latest Global Reporting Initiative, GRI G4 and OGSS framework and is available on the website of the Corporation at the link https:/ /www.iocl.com/download/IOCL_SR_Oct_2013-14.pdf

INFORMATION SYSTEMS

Your Corporation maintained cent per cent uptime of SAP operations during the year. A new warehouse management system was introduced for the first time at a CFA in Bengaluru during the year. A comprehensive website on PaHaL, www.MyLPG.in, was developed in English, Hindi and nine regional languages during the year under the aegis of MoP&NG. The website facilitates LPG consumers to make online booking of LPG refills and check their subsidy status, besides offering them a host of other facilities. A mobile application, m-power, for sales officers dealing with bulk consumers was launched during the year.

HEALTH, SAFETY & ENVIRONMENT (HSE)

Your Corporation is committed to conducting its business with a strong environment conscience, ensuring sustainable development, safe workplaces and enrichment of the quality of life of its employees, customers and the community at large. All refineries of your Corporation are certified to ISO:14064 standards for sustainable development as well as for the Occupational Health & Safety Management System (OHSMS/OHSAS-18001), besides operating fully equipped occupational health centres. Compliance with safety systems and procedures and environmental laws is being monitored at the unit level, division level and corporate level. The HSE activities of the Corporation are reviewed in every Board meeting. During the year, planned and surprise safety audits were carried out at various offices and locations.

ENERGY CONSERVATION

Your Corporation continues to accord importance and thrust to energy conservation at all its refineries and units. The performance of refineries is extensively monitored and efforts are made to keep abreast of the latest technological developments and global best practices. As a result of various energy conservation measures undertaken, the energy performance parameter (indexed to complexity of operations) in terms of MBN* of refineries of your Corporation during the year is down to 54.4, which is the best ever achieved, as against the energy index of 55.8 in the previous year. The energy conservation schemes implemented during the year resulted in estimated fuel savings of 1,07,000 MT Standard Refinery Fuel (SRF) in the year, valued at about Rs. 400 crore. In addition, your Corporation also spreads the message of energy conservation through workshops and seminars, besides conducting campaigns for retail and bulk consumers.

HUMAN RESOURCES

The employee strength of the Corporation was 32,962 as on 31st March, 2015; consisting of 15,298 executives and 17,664 non-executives. This includes 2,596 women employees comprising 7.87 per cent of the total workforce. During the year, cordial industrial relations were maintained.

Your Corporation provides comprehensive welfare facilities to its employees to take care of their health, efficiency, economic betterment, social status, etc., and to enable them to give their best at the workplace. Your Corporation has always supported a participative culture in the management of the enterprise through a consultative approach with the collectives and establishing a harmonious relationship for industrial peace and higher productivity. Employees'' participation is also ensured through information-sharing with the collectives and employees on a regular basis. The efforts to promote employees'' participation in management were continued during the year through various activities such as Suggestions Scheme, Total Productive Maintenance, Quality Circles, mentoring, etc.

In order to rejuvenate the organisation through a dynamic hierarchy of executives, a number of strategic interventions were initiated during the year covering the entire employee life-cycle. The emphasis of HR during the year was on demonstrating the core values of Care, Innovation, Passion and Trust in day- to-day actions and in developing a culture of treating employees as internal customers. This was born out of the theme for HR in 2014-15, which was ''investing in our people'' and making HR an effective business enabler, under which various initiatives were taken, which inter alia include the following:-

(i) Review of capability building and competency development programmes with a view to shift the emphasis from training to ''compulsory learning''.

(ii) Succession planning through leadership and development centres and multi- rater feedback mechanism.

(iii) Ideas Utsav as well as internal surveys to generate ideas and seek suggestions for simplifying HR policies and enhancing HR services.

Your Corporation is committed to diversity and inclusiveness and has adopted various practices to achieve women''s development and gender equality in the organisation. Women employees are rendered support to deal with their dual obligations with optimum results, both for themselves as well as for the organisation. All women employees have equal opportunities, equal rights and equal responsibilities. In addition, there are various welfare policies, viz., child adoption leave, child care leave, special leave without pay, etc. WIPS cells (formed under Forum of Women in Public Sector) strive to empower women through numerous developmental activities not only for women employees of the Corporation but also for women in the neighbourhood of IndianOil installations.

In compliance with the Official Language Act, 1963, Official Language Rules, 1976, and orders issued by the Government of India from time to time, efforts were continued during the year for increasing the progressive use of Hindi in official work. In all offices/ units/locations of the Corporation, committees are functioning for implementing the Office Language effectively and to review the progress of implementation of the Official Language policies.

Your Corporation is implementing the provisions of 3 per cent reservation for physically challenged and disabled persons in letter and spirit. Several concessions/relaxations are being extended to physically challenged persons in recruitment. The number of permanent employees with disabilities as on 31st March, 2015, was 512, i.e., 1.55 per cent of the total employee strength.

Presidential Directives and other guidelines issued by the Ministry of Petroleum & Natural Gas/Department of Public Enterprises from time to time with regard to reservation in services for Scheduled Castes, Scheduled Tribes, etc., were meticulously followed. Liaison officers were appointed at various locations/ units/installations all over the country to ensure implementation of the Government directives. Officials dealing with the subject were given training as required to enable them to update their knowledge on the subject and perform their job effectively. In accordance with para-29 of the Presidential Directive, statistics relating to representation of SCs/STs in the prescribed proforma, SC/ ST/OBC Report-I and SC/ST/OBC Report-II is attached at Annexure-I to the report.

COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Corporation is committed to prevention of sexual harassment of women at workplace and takes prompt action in the event of reporting of such incidents. In this regard, internal complaints committees have been constituted at various offices of the Corporation to deal with sexual harassment complaints, if any, and conduct enquiries.

There were three complaints of sexual harassment that were pending as on 1 April, 2014. During the year, three complaints were received and one complaint was disposed of. As on 31st March, 2015, five complaints are pending, which are being examined.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility has been the cornerstone of success for your Corporation right from its inception. The Corporation sees itself as an essential part of society and is well aware of its responsibilities beyond financial considerations towards improving the quality of life of the communities at large. A report on your Corporation''s CSR activities as per the provisions of the Companies Act, 2013 along with CSR Highlights during the year is attached at Annexure-II to the report.

The CSR Policy of the Corporation can be accessed at the website of the Corporation on the link https://www.iocl.com/aboutus/ ioc_s&csr_policy_07_2015.pdf

VIGILANCE

The objective of vigilance is to ensure maintenance of the highest level of integrity throughout the Corporation. To achieve this objective, the Vigilance group carries out preventive and punitive action, with greater emphasis on the preventive aspects. During the year, 68 vigilance awareness programmes were conducted, which were attended by about 1,600 employees. In order to promote transparency and efficiency in the working of the Corporation, various initiatives like e-tendering, e-collections, e-payments, file tracking system, etc., have been implemented.

PUBLIC DEPOSIT SCHEME

The Public Deposit Scheme of the Corporation was closed with effect from 31st August, 2009. The total outstanding deposits as on 31.03.2015 were Rs.55,000/-. The Company has not invited any deposits from the public during the year.

CORPORATE GOVERNANCE REPORT

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.

MANAGEMENT''S DISCUSSION & ANALYSIS REPORT

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

BUSINESS RESPONSIBILITY REPORT

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

AUDIT COMMITTEE

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

SECRETARIAL AUDIT

The Secretarial Audit Report for the year 2014-15 confirms that the Corporation has complied with all the applicable provisions of the corporate laws, guidelines, rules, etc. The report, duly certified by a practising Company Secretary, is attached at Annexure-III to the Report.

Your Corporation being a Government Company, the selection and appointment of Directors, terms of appointment and the remuneration payable to Directors is decided by the Government of India as per the Government guidelines and not by the Board of Directors. In view thereof, the Corporation has not reconstituted its Remuneration Committee to include the terms provided under the Companies Act, 2013. The performance evaluation of the Directors is also carried out by the administrative Ministry (MoP&NG), Government of India, as per applicable Government guidelines. The above is in line with the exemption provided to Government Companies by the Ministry of Corporate Affairs.

CODE OF CONDUCT

The Board of your Corporation has enunciated a code of conduct for the Directors and senior management personnel, which has been circulated to all concerned and has also been hosted on the corporate website. The Directors and senior management personnel have affirmed compliance with the code of conduct.

RISK MANAGEMENT

Your Corporation has a well laid-down Risk Assessment & Management process. A Risk Management Compliance Board comprising of senior management personnel is headed by Chief Risk Officer, which reviews the various risks associated with the Corporation''s business. During the year, in line with the provisions of Clause-49 of the Listing Agreement, a Risk Management Committee comprising Functional Directors has been constituted to oversee the risk management activities. A report would be, thereafter, put up to the Audit Committee and Board.

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate internal financial controls for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies; the safeguarding of its assets; the prevention and detection of frauds and errors; the accuracy and completeness of the accounting records; and the timely preparation of reliable financial information, which is commensurate with the operations of the Corporation. The Corporation has a separate Internal Audit department headed by an Executive Director (below Board-level), who directly reports to the Chairman. The Internal Audit department has a mix of officials from finance and technical functions, who carry out extensive audit throughout the year.

REMUNERATION TO THE AUDITORS

The Office of the Comptroller & Auditor General of India had appointed the Statutory Auditors for the financial year 2014-15. The Auditors'' remuneration for the year 2014-15 has been fixed at Rs. 114 lakh plus applicable taxes. In addition, reasonable out-of-pocket expenses at actuals incurred are also reimbursed.

COST AUDIT REPORT

The Cost Auditors were appointed for conducting the cost audit of Corporation''s refineries, lube blending plants, and other units for the year 2014-15. A remuneration of Rs. 16.50 lakh and applicable taxes had been fixed by the Board for payment to cost auditors for the year 2014-15, which was ratified by the shareholders in the last AGM. The cost audit for the year 2013-14 was carried out for the various units of the Corporation and the cost audit report was filed by the Central Cost Auditor with the Central Government in the prescribed form within the stipulated time period. The cost audit report for FY 2014-15 would also be filed within the stipulated time.

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

Your Corporation has taken necessary steps for implementation of the Public Procurement Policy of the Government of India for procurement from MSEs. All efforts are being made to procure items specified for procurement from MSEs. Necessary provision has been made in all the tenders stating the eligibility of MSEs to par ticipate in the tender. As against the target of 20% for procurement from MSEs, the actual procurement of your Corporation from MSEs during the year was about 41%.

SUBSIDIARIES AND JOINT VENTURES

During the year, a new Joint Venture Company, ''Kochi Salem Pipelines Pvt. Ltd.,'' between IndianOil & BPCL with equity participation of 50 per cent each, was formed for the purpose of laying the Kochi-Coimbatore-Erode-Salem LPG pipeline. Pursuant to the JV agreement between IndianOil/BPCL/HPCL/MIAL for the purpose of setting up common user integrated aviation fuel infrastructure in Mumbai, your Corporation acquired 25 per cent equity stake in ''Mumbai Aviation Fuel Farm Facility Pvt. Ltd.'' during the year. No subsidiary/JV has ceased to exist during the year. As required under the provisions of the Companies Act, 2013, a statement on the performance and financial position of each of the subsidiaries and joint venture companies is provided as an annexure to the Consolidated Financial Statement and is not repeated as part of the Directors'' Report to avoid duplication.

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

RELATED PARTY TRANSACTIONS (RPTs)

In line with the provisions of the Companies Act, 2013 and the Listing Agreement, a policy on material RPTs has been framed, which can be accessed on the website of the Corporation at link https://www.iocl.com/InvestorCenter/ Policy_on_Related_Party_Transactions.pdf. Your Corporation has undertaken transactions with related parties during the year. These transactions are in the ordinary course of business and on arm''s length basis. As per the RPT Policy, approval of the Audit Committee has been obtained for all RPTs. During the year, there were no material RPTs. The disclosures related to Related Party Transactions in accordance with applicable accounting standards are provided at Note-31 of the standalone financial statement.

REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

In accordance with the provisions of the Companies Act, 2013 and rules framed thereunder, particulars relating to Energy Conservation, Technology Absorption and Foreign Exchange earnings & outgo (on accrual basis) is annexed at Annexure-IV to the report.

PARTICULARS OF EMPLOYEES

As per the provisions of Section 197 of the Companies Act, 2013 and rules made thereunder, Government companies are exempted from inclusion of the statement of particulars of employees drawing remuneration of Rs. 60 lakh or more per annum, if employed throughout the financial year, or Rs. 5 lakh per month, if employed for part of the financial year. The information has, therefore, not been included as part of the Directors'' Report.

BOARD OF DIRECTORS

The following persons ceased to be Directors on the Board of the Corporation:-

- Shri A.M.K.Sinha, Director(Planning & Business Development) w.e.f. 01.08.2014

- Shri K.Jairaj, Independent Director w.e.f. 27.08.2014

- Shri Nesar Ahmad, Independent Director w.e.f. 27.08.2014

- Shri Sunil Krishna, Independent Director w.e.f. 27.08.2014

- Shri Sayan Chatterjee, Independent Director w.e.f. 27.08.2014

- Shri P.K.Goyal, Director (Finance) w.e.f. 01.09.2014

- Shri Rajive Kumar, Govt. Nominee Director w.e.f. 01.12.2014

- Shri M.Nene, Director(Marketing) w.e.f. 01.01.2015

- Shri V.S.Okhde, Director(Pipelines) w.e.f. 01.02.2015

- Dr. S.C.Khuntia, Govt. Nominee Director w.e.f. 16.06.2015.

- Smt. Shyamala Gopinath, Independent Director w.e.f. 25.06.2015

- Shri Shyam Saran, Independent Director w.e.f. 25.06.2015.

The following Directors were appointed on the Board of the Corporation:-

- Shri Debasis Sen, Director(Planning & Business Development) w.e.f. 15.09.2014

- Shri A.K.Sharma, Director(Finance) w.e.f. 27.10.2014

- Shri Verghese Cherian, Director (Human Resource) w.e.f. 06.01.2015

- Shri Anish Aggarwal, Director (Pipelines) w.e.f. 01.02.2015

- Dr. Archana Mathur, Govt. Nominee Director w.e.f. 29.05.2015

- Shri A.P. Sawhney, Govt. Nominee Director w.e.f. 22.07.2015

The Corporation has received a Certificate of Independence from all the Independent Directors confirming that they meet the criteria prescribed for Independent Directors under the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. A separate meeting of Independent Directors was held as per provisions of the Companies Act, 2013 and Listing Agreement.

During the year, 13 meetings of the Board of Directors were held. The details of the meetings attended by each Director are provided in the Corporate Governance Report and are not repeated here to avoid duplication.

No significant and material orders were passed by the regulators or courts or tribunals, which impact the going concern status of the Company and its operations in future.

VIGIL MECHANISM / WHISTLE-BLOWER POLICY

The Company has framed a whistle-blower policy wherein the employees are free to report any improper activity resulting in violation of laws, rules, regulations or code of conduct by any of the employees, to the Competent Authority or Chairman of the Audit Committee, as the case may be. Any such complaint is reviewed by the Competent Authority or Chairman of the Audit Committee. The confidentiality of those reporting violations shall be maintained and they shall not be subjected to any discriminatory practice. No employee has been denied access to the Audit Committee. The policy on Vigil Mechanism/Whistle-Blower can be accessed on the Corporation''s website at the link https://www.iocl.com/ InvestorCenter/Whistle_Blower_policy.pdf

DETAILS OF LOANS/INVESTMENTS/GUARANTEES

Your Corporation has provided Loans/Guarantees to its Subsidiaries/Joint Ventures and has made investments during the year in compliance with the provisions of the Companies Act, 2013. The details of such investments made and loans/guarantees provided as on 31st March, 2015, are given in the standalone financial statements under Notes 14, 28 & 36.

EXTRACT OF ANNUAL RETURN

As required under the provisions of the Companies Act, 2013, the extract of Annual Return for the financial year ended 31st March, 2015 in the prescribed form MGT-9 is attached at Annexure-V to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under clause (c) of sub-section (3) of Sec.134 of the Companies Act, 2013 with respect to the Directors'' Responsibility Statement, it is hereby confirmed that :

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

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

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

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

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

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

ACKNOWLEDGEMENTS

The Board of Directors would like to express its sincere appreciation for the dedicated efforts made and valuable services rendered by the members of the IndianOil family in the Corporation''s achievements during the year 2014-15. The Board would also like to thank the Government of India, particularly the Ministry of Petroleum & Natural Gas, and the various State Governments, regulatory and statutory authorities for their valuable guidance and support. The Board is grateful to all its stakeholders like bankers, investors, customers, consultants, technology licensors, contractors, vendors, etc, for their continued support and confidence reposed in the Corporation.

The Board wishes to place on record its appreciation of the valuable guidance and significant contribution made by Shri A.M.K.Sinha, Shri P.K.Goyal, Shri Rajive Kumar, Shri M.Nene, Shri V.S.Okhde, Dr. S.C.Khuntia, Smt. Shyamala Gopinath and Shri Shyam Saran during their tenure on the Board.

For and on behalf of the Board

(B. Ashok)

Chairman

Place : New Delhi

Dated : 22nd July, 2015


Mar 31, 2014

Dear Members,

On behalf of the Board of Directors, it gives me immense pleasure to present the 55th Annual Report of the Corporation for the financial year ended 31st March 2014, alongwith the Audited Statement of Accounts, Auditors'' Report and the Report of the Comptroller & Auditor General of India on the Accounts.

PERFORMANCE REVIEW

FINANCIAL

2013-14 2012-13

US$ Million Rs. in Crore US$ Million Rs.in Crore

Turnover (inclusive of Excise Duty) 75,666 4,57,553 76,200 4,14,909

EBITDA

(Profit Before Exceptional Items, Finance Cost, Tax, 3,146 19,023 3,175 17,284 Depreciation & Amortisation)

Finance Cost 840 5,084 1,182 6,435

Depreciation 953 5,760 956 5,201

Profit Before Tax & Exceptional Items 1,353 8,179 1,037 5,648

Exceptional Items 288 1,747 - -

Profit Before Tax 1,641 9,926 1,037 5,648

Tax Provision 480 2,907 118 643

Profit After Tax 1,161 7,019 919 5,005

Balance Brought Forward from Last Year 399 2,174 - -

Less: Appropriations

Proposed Dividend 349 2,112 276 1,505

Corporate Dividend Tax 59 359 47 256

Insurance Reserve 3 20 4 20

Bond Redemption Reserve 198 1,196 97 528

CSR Reserve (3) (17) 4 22

General Reserve 954 5,523 92 500

Balance Carried to Next Year - - 399 2,174

SHARE VALUE

2013-14 2012-13

US$ Rs. US$ Rs.

Cash Earnings per share 0.87 52.63 0.77 42.04

Earnings per share 0.48 28.91 0.38 20.61

Book value per share 4.54 271.80 4.64 251.75

Note: Exchange Rate used:- For 2013-14 Average Rate 1 US$ = Rs. 60.47 and Closing Rate 1 US$ = Rs. 59.92 as on 31.03.2014 For 2012-13 Average Rate 1 US$ = Rs. 54.45 and Closing Rate 1 US$ = Rs. 54.29 as on 31.03.2013

PHYSICAL

Million Tonnes

2013-14 2012-13

Refineries Throughput 53.13 54.65

Pipelines Throughput 73.07 75.17

Product Sales (incl. of Gas, Petrochemicals & Exports) 75.53 76.24

DIVIDEND

The Board of Directors of your Corporation is pleased to recommend a dividend of 87%, i.e., Rs. 8.70 per equity share of Rs. 10/- each, on the paid-up Share Capital as against Rs. 6.20 per share declared in the previous year. This is the 47th consecutive year for which your Corporation has recommended payment of dividend. So far, your Corporation has paid a cumulative dividend of Rs. 23,601 crore, excluding the dividend of Rs. 2,112 crore payable for the current year, subject to approval by shareholders. The dividend shall be paid to the members whose names appear in the Register of Members as well as the Beneficial Ownership Position provided by NSDL/CDSL as on 19th August, 2014.

PUBLIC DEPOSIT SCHEME

The Public Deposit Scheme of the Corporation was closed with effect from 31st August, 2009. The total outstanding deposits as on 31.03.2014 were Rs. 55,000/-.

CONTRIBUTION TO EXCHEQUER

Your Corporation has consistently been the largest contributor to the national exchequer in the form of duties and taxes. During the year 2013-14, Rs. 86,164 crore was paid to the exchequer as against Rs. 79,819 crore paid in the previous year. An amount of Rs. 27,293 crore was paid to the Central Exchequer and Rs. 58,871 crore to the State Exchequers as against Rs. 26,489 crore and Rs. 53,330 crore paid in the previous year to the Central and State Exchequers respectively.

CONSOLIDATED FINANCIAL STATEMENTS

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

2013-14 2012-13

US$ million Rs.in crore US$ million Rs.in crore

Turnover (inclusive of Excise Duty) 78,697 4,75,878 79,328 4,31,940

Profit Before Tax 1,650 9,978 827 4,504

Profit After Tax 1,152 6,967 666 3,627

Less: Share of minority (20) (119) (151) (822)

Profit for the group 1,172 7,086 817 4,449

Note: Exchange Rate used:

For 2013-14 Average Rate 1 US$ = Rs. 60.47

For 2012-13 Average Rate 1 US$ = Rs. 54.45

CORPORATE GOVERNANCE

Your Corporation consistently endeavours 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.

MANAGEMENT''S DISCUSSION & ANALYSIS REPORT

The Management''s Discussion & Analysis Report (MDA) for the year 2013-14, as required under Corporate Governance guidelines, has also been incorporated as a separate section forming part of the Annual Report.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report forms part of the Annual Report in accordance with the directives of SEBI vide circular dated 13th August, 2012 mandating the top 100 listed entities (including IndianOil) to include Business Responsibility Report on initiatives taken with regard to environmental, social & governance perspectives.

SECRETARIAL AUDIT

As a good corporate governance practice, your Corporation has been conducting secretarial audit of its records and documents since 2009-10. The Secretarial Audit Report for the year 2013-14 confirms that the Corporation has complied with all the applicable provisions of the corporate laws, guidelines, rules, etc. The report, duly certified by a practising Company Secretary, is provided separately in the Annual Report.

CODE OF CONDUCT

The Board of your Corporation has enunciated a code of conduct for the Directors and Senior Management Personnel, which has been circulated to all concerned and has also been hosted on the corporate website. The Directors and Senior Management Personnel have affirmed compliance with the code of conduct, except Shri Sudhir Bhalla, Director(HR), who was in a serious medical comatose condition since February, 2012.

MoU PERFORMANCE

As in the past, the Memorandum of Understanding (MoU) of your Corporation with the Govt. of India setting the performance parameters for the year 2013-14 was signed by the Chairman, IndianOil, and the Secretary (P&NG), Govt. of India, on 25th March, 2013. The thrust while arriving at the MoU targets was broadly on the long term perspective, while at the same time covering all the critical operations of the Corporation, including crude throughput, Product Pipeline throughput, Project implementation, Capital expenditure, Distillate yield, Energy Factor, Safety, Quality and new areas of Business Development. Specific weightage has also been assigned to CSR, Sustainable Development, HRM and R&D.

Despite the various challenges during the year 2013-14, the Corporation was able to meet the MoU targets under various parameters as per the MoU with the Government. The Corporation has earned "Excellent" MoU performance rating consistently from 1989-90 to 2012-13 (except in the year 2006-07). The performance rating for 2013-14 MoU is yet to be finalised by the Government.

OPERATIONAL PERFORMANCE

Refineries

The year 2013-14 was a significant year for your Corporation''s Refineries Division in terms of many initiatives taken for improving plant reliability and consolidation of operations in pursuit of excellence. The refineries achieved the combined distillate yield of 78.1 wt% during the year, which is the same as that achieved in the previous year. The eight refineries of your Corporation achieved a combined crude oil throughput of 53.13 million tonnes during the year, with an overall capacity utilisation of 98%, as against a throughput of 54.65 million tonnes and capacity utilisation of 100.8% in the previous year. The marginal fall in the throughput and capacity utilisation is mainly due to the shutdown of Mathura Refinery for a period of 45 days for project related activities. The refineries also recorded the lowest ever specific energy consumption of 55.8 MBTU/BBL/NRGF (MBN*) during the year. Nine new crude oil grades (including high-TAN crudes such as Marlim and Dalia) were processed by the Corporation''s refineries for the first time during the year in order to widen the crude basket for derisking supply sources and to improve the margins.

*MBN–Thousand British Thermal Unit / Barrel / Energy Factor (MBTU/BBL/NRGF)

Pipelines

The Corporation''s pipelines network achieved a throughput of 73.07 million tonnes in 2013-14 as against a throughput of 75.17 million tonnes achieved in the previous year. The marginal drop in the throughput was due to reduction in throughput of the refineries. The product pipelines achieved a throughput of 27.21 million tonnes during the year as against 27.77 million tonnes in the previous year. Similarly, the crude oil pipelines registered a throughput of 45.86 million tonnes during the year as against 47.40 million tonnes in the previous year. The gas pipeline recorded the highest ever throughput of 1168 MMSCM, surpassing the previous highest throughput of 960 MMSCM achieved during the previous year. The combined length of your Corporation''s network of crude oil, product and gas pipelines as on 31.03.2014 was 11,214 km.

Marketing

IndianOil maintained its position as the market leader for the year 2013-14 with domestic sales of 67.14 million tonnes of petroleum products. However, the overall volumes registered a drop of 1.5 million tonnes as compared to the previous year on account of the prevailing dual-pricing policy in diesel resulting in decline in bulk sales of diesel. However, the Corporation performed well in retail sales of diesel.

To keep pace with the high growth in the retail business, 1,717 retail outlets (including 764 Kisan Seva Kendra Outlets) were commissioned during the year, raising their total number to 23,993. The contribution of KSK outlets to total sales during the year reached a new high of 11.6% in Petrol(Retail) & 11.7% in Diesel(Retail). 1,700 ROs were brought under automation during the year, taking the total number of automated retail outlets to 6,077. The concept of NANF (No Automation, No Fuelling) was extended to over 1,150 more retail outlets during the year. The concept of city specific automation was implemented in all retail outlets of 4 cities viz. Chandigarh, Mangalore, Jamnagar and Vadodara.

IndianOil increased its market share in the LPG segment during the year and released a record number of new connections, besides augmenting its bottling and storage capacities and expanding its distributorship network, especially in the rural areas. New initiatives were launched to enhance product availability and customer convenience, such as portability of LPG connection within and across companies and sale of 5-kg free-trade LPG cylinders through select ROs and kirana stores. A record 80.3 lakh new domestic LPG connections were released, raising the Indane customer strength to 817.9 lakh. 106 regular LPG distributorships and 478 RGGLV distributorships were commissioned during the year to further expand the retail network.

Between June 2013 and January 2014, the Aadhaar based DBTL (Direct Benefit Transfer in LPG) Scheme for subsidy transfer directly to the beneficiaries was introduced in 6 phases, covering 3,732 distributors and 4.24 crore Indane consumers of IndianOil. Under this unique scheme, 12.1 million consumers were benefited and more than Rs. 2,230 crore was transferred to the Aadhaar linked bank account of individual consumers. At present, the scheme has been kept in abeyance and a committee has been constituted to review the scheme for better implementation.

IndianOil''s finished lube sales registered a decline of 1.7% over the previous year. Constraints in availability of base oil from Chennai Petroleum Corporation (CPCL) Refinery and non-availability of rubber process oil over a four-month period affected the overall sales volumes for the year 2013-14. Besides launch of a new lubricant for gearless scooters during the year, long-term tie-ups were concluded with major customer groups for marketing a wide range of products and approvals obtained for the SERVO range products from leading Equipment

Builder Approver (EBA) / Original Equipment Manufacturers (OEMs) in India and abroad. A breakthrough was achieved in overseas marketing with export of 165 kl of marine engine oils to Madagascar, Yemen and Nigeria.

IndianOil''s Aviation Service maintained its leadership position during the year by improving its market share to an all-time high of 64.5%. Against the Industry growth of 4.4%, IndianOil aviation fuel sales registered a volume growth of 6% during the year. The improvement in market share was largely aided by aggressive bidding in the international sector and strong tie-ups with major players in the domestic sector.

Assam Oil and IBP Divisions

The Assam Oil Division (AOD) continued to play a vital role in ensuring supply of petroleum products in the north-east region. The Digboi Refinery processed 0.65 million tonnes of crude oil during the year.

During the year, the Explosives and Cryogenics businesses of IBP Division continued with its robust performance and recorded the highest ever production and sales of explosives and cryocans. The Explosives group manufactured and sold 85,264 MT of explosives during the year, recording growth of 6.16% over previous year''s volume of 80,313 M T. The Cryogenics group sold 23,747 units of cryocans during 2013-14, recording 28.83% growth over the previous year''s sale of 18,433 units. The Cryogenics group designed and manufactured a liquid oxygen storage tank and delivery system alongwith PLC controls for the Naval Materials Research Laboratory (NMRL), DRDO, Ministry of Defence, Government of India. This was the country''s first indigenous land based prototype for fuel cell powered submarines.

RESEARCH & DEVELOPMENT

During the year, your Corporation''s R&D Centre at Faridabad made significant progress in the demonstration and commercialisation of some of the technologies developed inhouse. The Centre expanded the OEM approval base of SERVO lubricants with the development of new formulations of low-viscosity and energy-efficient lubricants. During the year, 130 lubricant formulations were developed and 48 product approvals were obtained from OEMs & Defence services. The IndMax technology developed by the Centre is being actively considered by refineries of other Oil Companies besides the 4.17 million tonnes per annum IndMax unit at your Corporation''s Paradip Refinery. The demonstration unit of INDAdeptG, another technology developed by IndianOil''s R&D Centre with low Hydrogen consumption for Sulphur reduction in Motor Gasoline, is being implemented at the Corporation''s Guwahati Refinery. The R&D Centre has developed a process "OCTAMAX" for upgradation of C4 hydrocarbons from refinery LPG stream to high-octane gasoline blending stock. The Bio-Energy Research Centre has signed an agreement with Lanzatech to develop a micro-algae technology that entails development of an acetate-to-lipid pathway and evaluation of its viability for CO2 gas fermentation technology.

In order to harness futuristic energy sources, your Corporation took the initiative of setting up IndianOil Centre for Alternative & Renewable Energy (i-CARE) at Manesar, near Delhi. Besides, Bio-Energy, this Centre will also focus on gasification technology, solar, thermal and hydrogen energy, including fuel cells.

Research activities carried out during the year resulted in filing of 54 new patents, surpassing the previous year''s record of 52 patents. Eleven patents were granted during the year including overseas patents taking the number of patents owned by the Centre to 292 as on 31.03.2014.

EXPANDING BUSINESS

Beyond the core business of refining, transportation and marketing of petroleum products, your Corporation has been working towards strengthening its presence in the oil & gas value chain. The Corporation''s endeavours in diversified businesses such as Petrochemicals, E&P, Gas and Alternative Energy sources have over the years consolidated, establishing it as a major player in some of these new areas. These diversified businesses have made the Corporation''s portfolio more vibrant and have also begun contributing to its bottomline.

Petrochemicals

Your Corporation has emerged as the second largest petrochemicals player in the country. During the year, your Corporation''s petrochemicals business scaled new heights and achieved the highest ever sales since its inception. The Corporation sold 2.12 million tonnes of petrochemicals (including exports) against 2.08 million tonnes during the previous year. New overseas markets, covering 16 countries in Africa, Latin America & Europe, were added to the export list during the year.

During the year, your Corporation developed six new polyethylene and polypropylene grades with a view to increase its customer base. Besides this, nine Original Equipment Manufacturer (OEM) approvals were obtained during the year for the Corporation''s polymer products.

During the year, your Corporation''s persistent endeavours in the petrochemicals space helped it extend its frontiers with the commissioning of 138 kta Butadiene Extraction Unit (BDEU) and 120 kta Styrene Butadiene Rubber (SBR) plant at Panipat. This SBR plant, set up as a joint venture, is India''s first for import substitution.

Gas

Gas business presents a major opportunity for your Corporation to maximize its prospects across the gas value chain. During the year, the Corporation''s gas sales grew by 5.7%, reaching 1.94 million tonnes against sales of 1.83 million tonnes achieved in the previous year. LNG sales through ''LNG at the Doorstep'' business model increased to 30,036 MT, registering a growth of 16%.

Your Corporation''s endeavours in strengthening its presence in the gas infrastructure and delivery capability in the country received a major boost as its consortium with other partners was awarded authorisation for city gas distribution projects in the cities of Chandigarh & Allahabad. The Corporation has also booked 1.5 million tonnes per annum additional LNG capacity at Dahej Terminal of Petronet LNG Limited. The Corporation is also currently setting up its maiden 5-million tonnes per annum LNG import, storage and regasification terminal at Ennore, which is targeted for completion in 2016-17. The work is progressing in three pipeline projects being implemented through two joint ventures (GSPL India Gasnet Limited and GSPL India Transco Limited) in which IndianOil has 26% of equity participation.

Exploration & Production (E&P)

Your Corporation has a portfolio of 13 domestic and 11 overseas blocks currently. Among the domestic blocks, the Corporation is the operator with 100% participating interest in 2 onshore exploration blocks in Cambay basin and holds non-operating participating interest in the range of 20% to 44% in the remaining blocks. In the overseas blocks located across eight countries, the Corporation holds non-operating participating interest in the range of 3.5% to 50%. Your Corporation had acquired 10% working interest in the producing Niobrara Shale Oil Asset in the State of Colorado, USA, in October, 2012.

During the year, your Corporation expanded its overseas portfolio with the acquisition of 10% interest in new integrated upstream & LNG project- the Pacific North West LNG, based on unconventional gas, in British Columbia, Canada. This interest was acquired through a wholly owned subsidiary of the Corporation incorporated in Netherlands, which in turn incorporated a wholly owned subsidiary in Canada. This is a producing asset with total gross 2P reserves of 8.35 tcfe and has generated a gross revenue of CAD 1.56 million during the year. The Corporation will have access to assured LNG supply of 1.2 million tonnes per annum from this project for a minimum period of 20 years.

Alternative Energy

Your Corporation has been expanding its presence in the alternative energy space. During the year, the Corporation commissioned a 14.7 MW capacity wind energy project at Gandikota in Andhra Pradesh. With this, total renewable installed capacity of the Corporation reached 68 MW, which includes 63 MW of wind and 5 MW of solar energy.

Sustainable Development

Sustainable Development is a key tenet of the business philosophy of your Corporation. During the year, the Corporation solarised 887 retail outlets taking the total number of solarised retail outlets to 1265. During the year, solar PVs were installed at 13 repeater-cum-cathodic protection stations of Southern Region Pipelines, Orissa State Office building and Divisional Office at Indore. With a view to reduce the water footprint of the organisation and to increase water availability for daily operations through rainwater harvesting, the Corporation commissioned rainwater-harvesting systems in 54 locations during the year. Energy audit was completed for 51 office buildings in various locations. The Corporation''s Sustainability Report 2012-13 in e-version as well as an abridged printed version of highlights were released during the year. The report is compliant with the Global Reporting Initiative, GRI G3.1 and OGSS with A rating from an external assurance agency.

Consultancy Services

Leveraging its vast experience in core business activities, your Corporation has been providing consultancy services, especially to refiners in other developing countries. During the year, it continued having structured interactions with prospective countries and received offers for consultancy services in various refinery projects.

INTERNATIONAL TRADE

Your Corporation imported 42.55 million tonnes of crude oil valued at Rs. 2,02,492 crore during the year, as against 42.53 million tonnes valued at Rs. 1,84,559 crore in the previous year, to meet its crude oil requirements through a carefully selected and diversified mix of supply sources. The import of petroleum products during the year was 3.74 million tonnes, valued at Rs. 21,414 crore, as against 4.26 million tonnes valued at Rs. 21,289 crore in the previous year. The Corporation also exported petroleum and petrochemical products worth Rs. 21,525 crore during the year as against Rs. 18,549 crore in the previous year.

BUSINESS PROCESS OPTIMISATION

Your Corporation''s Business Process Optimisation group continues to play key role in improving refinery margins through reduction in crude input cost for which several initiatives were taken to process new and cheaper crudes. Further, crude and product inventories were managed through optimum purchases. Investment proposals for new projects were evaluated under various scenarios of demand and prices through optimisation models, which helped in assessing the net impact of the investment on the overall corporate profitability.

INFORMATION SYSTEMS

Your Corporation maintained 100% uptime of its centralised online SAP operations during the year. An SMS indenting system was introduced for LPG as well as other consumer groups, for enhanced customer satisfaction. The purchase functions of the Corporation spread across the country use the e-tendering application for purchase of goods and services. During the year, several IT-enabled marketing initiatives were launched, such as X-Sparsh, X-Snehash, Dealer Annual Return and Retail Dashboard to facilitate interaction with and reporting by retail outlet dealers.

HEALTH, SAFETY & ENVIRONMENT (HSE)

Your Corporation is committed to conduct its business with a strong environment conscience, ensuring sustainable development, safe workplaces and enrichment of the quality of life of its employees, customers and the community at large. All IndianOil refineries are cer tified to ISO:14064 standards for sustainable development as well as for the Occupational Health & Safety Management System (OHSMS/OHSAS-18001), besides operating fully equipped occupational health centres. Compliance with safety systems and procedures and environmental laws is being monitored at the unit level, division level and corporate level. The HSE activities of the Corporation are reviewed in every Board meeting. During the year, planned and surprise safety audits were carried out at various offices and locations. A safety culture improvement project named ''SEED'' – Safety in Each & Every Deed'' was launched during the year at Gujarat Refinery. M/s. DuPont – the global leader in employee safety have been engaged for the purpose for a period of three years.

ENERGY CONSERVATION

Your Corporation continuously gives thrust on Energy conservation through extensive performance monitoring at all its refineries and units. Keeping abreast with the latest technological developments and global best practices is a major thrust area for your Corporation in achieving energy conservation. As a result of the various energy conservation measures undertaken on a continuous basis, the energy performance parameter in terms of MBN* of IndianOil refineries during the year is down to 55.8, which is the best ever achieved, as also against the energy index of 56.3 in the previous year. The energy conservation schemes implemented during the year resulted in an estimated fuel savings of 1,02,800 MT of Standard Refinery Fuel (SRF), valued at about Rs. 420 crore. In addition, various initiatives are taken to highlight the importance of energy conservation through seminars and campaigns for retail and bulk consumers.

*MBN– Thousand British Thermal Unit / Barrel / Energy Factor (MBTU/BBL/NRGF)

HUMAN RESOURCES

The employee strength of the Corporation was 33,793 as on 31.03.2014; consisting of 15,407 executives and 18,386 non-executives. This includes 2,642 women employees comprising 7.82% of the total workforce. Besides, maintaining a cordial industrial relations climate during the year, your Corporation continued to provide comprehensive welfare facilities to all members of the IndianOil family.

Your Corporation has always encouraged par ticipative culture in the management by adopting a consultative approach with the collectives, establishing a harmonious relationship for industrial peace and higher productivity. Employees'' participation is ensured through information-sharing with the collectives and employees on a regular basis while seeking their support, suggestions and co-operation. The efforts to promote employees'' participation in management were continued during the year through activities such as Suggestions Scheme, Quality Circles, Total Productive Maintenance (TPM), Mentoring, etc.

Your Corporation has adopted forward-looking strategies such as women development and gender equality in pursuit of its commitment to diversity and inclusiveness. Women employees are rendered support through various initiatives to deal with their dual obligations with optimum results, both for them and for the organisation. All women employees have equal opportunities, equal rights and equal responsibilities. In addition, there are women-oriented policies, viz. child adoption leave, child care leave, special leave without pay. WIPS cells (formed under Forum for Women in Public Sector) strive to empower women by undertaking numerous developmental activities not only for the women employees of the Corporation but also for those in the neighbourhood of its units.

A number of strategic interventions were initiated during the year to rejuvenate the organisation through a dynamic hierarchy of executives covering the entire employee lifecycle. Some of the key initiatives that were implemented for the executives include a comprehensive transfer policy and career path model; succession planning – through leadership centres and multi-rater feedback mechanism; new accelerated career progression scheme; recruitment of a new grade A0, etc.

The Presidential Directives and various instructions / guidelines issued by the Government of India with regard to reservation in services for SCs/STs/PH/ OBCs, etc, were meticulously followed. Your Corporation endeavors to utilise 25% of its community development funds towards Special Component Plan (SCP) and Tribal Sub Plan (TSP) for meeting the needs of the weaker sections. Liaison officers were appointed at various locations/units/installations all over the country to ensure implementation of the Government directives. Reports in the prescribed form relating to representation of SCs/STs/OBCs are provided in the Annual Report as Report I & II.

Your Corporation is implementing the provisions of the Disabilities Act 1995 by way of 3% reservation for physically challenged and disabled persons. In addition, various concessions and relaxations are being extended to physically challenged persons in the recruitment process.

Efforts were continued during the year for increasing the progressive use of Hindi in official work in compliance with the Official Language Act, 1963, Official Language Rules, 1976 and related orders issued by the Government of India from time to time. In all offices/units/locations of the Corporation, committees are functioning for implementing Official Language work effectively and to review the progress of implementation of Official Language policies in the offices as also the Annual Programme as circulated by the Department of Official Language, Govt. of India.

VIGILANCE

The objective of Vigilance is to ensure maintenance of the highest level of integrity throughout the Corporation. To achieve this objective, the Vigilance group carries out preventive and punitive functions, with greater emphasis on the preventive aspects. During the year, 48 vigilance awareness programmes were conducted, which were attended by over 1300 employees. In order to promote transparency and efficiency in the working of the Corporation, various initiatives like e-tendering, bill watch system, standardisation of schedule of rates, file tracking system, etc., have been implemented.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility has been the cornerstone of success for your Corporation right from inception. The Corporation sees itself as an essential part of society and is well aware of its responsibilities beyond financial considerations towards improving quality of life of the communities at large. A report on your Corporation''s CSR activities has been incorporated as a separate section forming part of the Annual Report.

REMUNERATION TO THE AUDITORS

The Auditors'' remuneration for the year 2013-14 has been fixed at Rs. 90 lakh plus applicable taxes. In addition, reasonable out-of-pocket expenses at actuals incurred are also reimbursable.

PUBLIC PROCUREMENT POLICY FOR MSMEs 2012

Necessary steps have been initiated by the various divisions of the Corporation for implementation of the Public Procurement Policy of the Govt. of India for procurement from MSMEs. All effor ts are being made to procure items specified for procurement from MSMEs. Necessary provision has been made in all the tenders stating the eligibility of MSMEs to participate in the tender. The MSMEs are exempted from payment of tender fees and earnest money deposit. As against the target of 20% for procurement from MSMEs, the actual procurement of your Corporation from MSMEs during the year was around 32%.

COST AUDIT REPORT

In accordance with the directives of the Central Government, Cost Auditors were appointed for conducting the cost audit of IndianOil''s refineries, lube blending plants and other units of the Corporation for the year 2013-14. The cost audit for the year 2012-13 was carried out for the refineries, lube plants, etc. and the cost audit report was filed by the Central Cost Auditor with the Central Govt. in the prescribed form within the stipulated time period. A remuneration of Rs. 16.50 lakh and applicable taxes has been fixed by the Board for payment to cost auditors for the year 2013-14.

SUBSIDIARIES AND JOINT VENTURES

Your Corporation has formed various subsidiaries and joint ventures for exploiting business opportunities across the hydro-carbon value chain. The financial performance of major operating subsidiaries and joint venture companies of the Corporation during 2013-14 is annexed to the Directors'' Report.

In accordance with the General Exemption granted by the Ministry of Corporate Affairs, the balance sheet, statement of profit and loss and other documents of the subsidiary companies have not been attached with the balance sheet of the Company. A summary of the financial information of the Company''s subsidiaries for the financial year ended March 31, 2014 has been incorporated separately in the Annual Report. The Annual Accounts of the subsidiaries and the related information will be made available to any member of the Company/ its subsidiaries seeking such information and are available for inspection at the Registered Office of the Company.

REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

In accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rule, 1988, a report on Energy Conservation, Technology Absorption and Foreign Exchange earnings & outgo is annexed.

PARTICULARS OF EMPLOYEES

As per Notification No. GSR 289(E) dated 31st March, 2011 issued by the Ministry of Corporate Affairs, Govt. of India, amending the provisions of the Companies (Particulars of Employees) Rules, 1975 issued in terms of Section 217(2A) of the Companies Act, 1956, Government companies are not required to include the statement of particulars of employees drawing remuneration of Rs. 60 lakhs or more per annum, if employed throughout the financial year or Rs. 5 lakhs per month, if employed for part of the financial year. The information has not been included as part of the Directors Report as per the said Notification as IndianOil is a Government Company.

BOARD OF DIRECTORS

During the year, the following persons ceased to be Directors on the Board of the Corporation:- - Late Prof. V. K.Bhalla, Independent Director w.e.f. 06.08.2013

- Late Shri Sudhir Bhalla, Director(HR) w.e.f. 23.05.2014

- Dr. Sudhakar Rao, Independent Director w.e.f. 30.05.2014

- Shri R.S.Butola, Chairman w.e.f. 01.06.2014

- Dr.R.K.Malhotra, Director (R&D) w.e.f. 01.07.2014

- Shri Rajkumar Ghosh, Director(Refineries) w.e.f. 01.07.2014

The following Directors were appointed to the Board of the Corporation:

- Shri K.Jairaj, Independent Director, w.e.f. 20.03.2014

- Shri Nesar Ahmad, Independent Director, w.e.f. 20.03.2014

- Shri Sunil Krishna, Independent Director, w.e.f. 20.03.2014

- Shri Sayan Chatterjee, Independent Director, w.e.f. 20.03.2014

- Shri Sanjeev Singh, Director(Refineries), w.e.f. 01.07.2014

- Shri B. Ashok, Chairman, w.e.f. 16.07.2014

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March 2014, all applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the Directors had 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) that the Directors had prepared the accounts for the financial year ended 31st March 2014 on a ''going concern'' basis.

ACKNOWLEDGEMENTS

The Board of Directors would like to express its appreciation for the dedicated efforts and valuable services rendered by the members of the IndianOil family in the Corporation''s achievements during the year 2013-14. The Board would also like to thank the Government of India, particularly the Ministry of Petroleum & Natural Gas, and the various State Governments, regulatory and statutory authorities for their valuable guidance and support. The Board is grateful to all its stakeholders like bankers, investors, customers, consultants, technology licensors, contractors, vendors, etc, for their continued support and confidence reposed in the Corporation.

The Board wishes to place on record its appreciation of the valuable guidance and significant contribution made by late Prof.V.K.Bhalla, late Shri Sudhir Bhalla, Dr. Sudhakar Rao, Shri R.S. Butola, Dr. R.K. Malhotra and Shri Rajkumar Ghosh during their tenure on the Board.

For and on behalf of the Board

Place : New Delhi (B Ashok)

Date : 17th July 2014 Chairman


Mar 31, 2013

Dear Members,

The behalf of the Board of Directors, it is my privilege to present the 54th Annual Report of the Corporation for the financial year ended 31st March 2013, alongwith the Audited Statement of Accounts, Auditors'' Report and the Report of the Comptroller & Auditor General of India on the Accounts.

PERFORMANCE REVIEW FINANCIAL

2012-13 2011-12 US$ Million Rs. in Crore US$ Million Rs. in Crore

Turnover

(inclusive of Excise Duty) 76,200 414,909 78,031 373,926

EBITDA (Profit before Exceptional Items, Finance cost, Tax, 3,170 17,258 4,574 21,919 Depreciation & Amortisation)

Finance Cost 1,177 6,409 1,166 5,590

Depreciation 956 5,201 1,016 4,867

Profit before Tax & Exceptional Items 1,037 5,648 2,392 11,462

Exceptional Items - - 1,609 7,708

Profit Before Tax 1,037 5,648 783 3,754

Tax Provision 118 643 (42) (201)

Profit After Tax 919 5,005 825 3,955

Less: Appropriations

Proposed Dividend 276 1,505 253 1,214

Corporate Dividend Tax 47 256 40 194

Insurance Reserve 4 20 4 20

Bond Redemption Reserve 97 528 131 627

CSR Reserve 4 22 - -

General Reserve 92 500 397 1,900

Balance carried to Balance Sheet 399 2,174 - -

PHYSICAL

Million Metric Tonnes (MMT)

2012-13 2011-12

Refineries Throughput 54.65 55.62

Pipelines Throughput 75.50 75.55

Product Sales (incl. of Gas, Petrochemicals & Exports) 76.24 75.66

SHARE VALUE

2012-13 2011-12

US$ Rs. US$ Rs.

Cash Earning per share 0.77 42.04 0.76 36.34

Earning per share 0.38 20.61 0.34 16.29

Book value per share 4.64 251.75 4.69 238.38

DIVIDEND

The Board of Directors is pleased to recommend a dividend of 62%, i.e., Rs. 6.20 per equity share of Rs. 10/- each, on the Paid-up Share Capital as against Rs. 5.00 per share in the previous year. Your Corporation has been consistently paying dividend for the past 46 years. So far, the Corporation has paid a cumulative dividend of Rs. 22,096 crore, excluding the dividend of Rs. 1,505 crore payable for the current year, subject to approval by shareholders. The dividend shall be paid to the members whose names appear in the Register of Members as well as the Beneficial Ownership Position provided by NSDL/CDSL as on 23rd August, 2013.

PUBLIC DEPOSIT SCHEME

The Public Deposit Scheme was closed with effect from 31st August, 2009. The total outstanding deposits as on 31.03.2013 are Rs. 55,000/-.

CONTRIBUTION TO EXCHEQUER

The Corporation has consistently been the largest contributor to the national exchequer in the form of duties and taxes. During the year, Rs. 79,819 crore was paid to the exchequer as against Rs. 78,914 crore in the previous year. Rs. 26,489 crore was paid to the Central Exchequer and Rs. 53,330 crore to the State Exchequers as against Rs. 29,864 crore and Rs. 49,050 crore paid in the previous year to the Central and State Exchequers respectively.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India, your Corporation has prepared the Consolidated Financial Statements of its subsidiaries and joint venture entities. The highlights of the Consolidated Financial Results are as follows:

2012-13 2011-12

US$ million Rs. in crore US$ million Rs. in crore

Turnover (inclusive of 79,328 431,940 80,977 388,044 Excise Duty)

Profit Before Tax 827 4,504 834 3,995

Profit After Tax 666 3,627 890 4,265

Less: Share of minority (151) (822) 8 39

Profit for the group 817 4,449 882 4,226

CORPORATE GOVERNANCE

The Corporate Governance Report and Management''s Discussion & Analysis Report have been incorporated as separate sections, forming part of the Annual Report. The Corporation has been recently adjudged the winner of two prestigious awards for excellence in Corporate Governance, viz., ICSI National Award 2012 for Excellence in Corporate Governance from the Institute of Company Secretaries of India and the Gold Trophy of the SCOPE Meritorious Award for Corporate Governance for the year 2011-12.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report forms part of the Annual Report in accordance with directives of SEBI vide circular dated 13th August, 2012 mandating the Top 100 listed entities (including the Corporation) to include Business Responsibility Report on initiatives related to environmental, social & governance perspective.

SECRETARIAL AUDIT

As a good corporate governance practice, the Corporation has carried out a secretarial audit of its records and documents for the year 2012-13. The Secretarial Audit Report confirms that the Corporation has complied with all the applicable provisions of the corporate laws, guidelines, rules, etc. The Report, duly certified by a practising Company Secretary, is provided separately in the Annual Report.

CODE OF CONDUCT

The Board of the Corporation has enunciated a code of conduct for the Directors and Senior Management Personnel, which has been circulated to all concerned and has also been hosted on the website of the Corporation. The Directors and Senior Management Personnel have affirmed compliance with the code of conduct, except Shri Sudhir Bhalla, Director(HR), who is in a serious medical condition.

MoU PERFORMANCE

The Memorandum of Understanding (MoU) is signed every year between the Corporation and its administrative Ministry, MoP&NG, Govt. of India with the aim to enhance the performance level of the Corporation as per the targets set therein. The MoU for the year 2012-13 was signed between the Chairman and the Secretary(P&NG), Govt. of India on 30th March, 2012.

The thrust while fixing MoU targets was more towards the long term aspects and broadly covered all the critical operations of the Corporation which include Crude throughput, Project implementation, Capital expenditure, Distillate yield, Safety, Quality and new areas of Business Development. Specific weightage has also been allocated to the areas of CSR, HRD, Sustainable Development, R&D and Corporate Governance.

Despite the challenges, the Corporation was able to meet all the physical targets and all the mandatory parameters as per 2012-13 MoU targets signed with the Government. The Corporation has earned Excellent rating consistently for its performance in MoU ratings since 1989-90 to 2011-12 (except in 2006-07). The evaluation for 2012-13 MoU ratings is yet to be carried out by the Government.

OPERATIONAL PERFORMANCE

Refineries

The Corporation''s refineries achieved a brilliant performance during the year. The eight refineries of the Corporation achieved a combined crude oil throughput of 54.65 million tonnes during the year, with an overall capacity utilisation of 100.8%, as against a throughput of 55.62 million tonnes and capacity utilisation of 102.6% in the previous year. The refineries have been consistently registering an overall capacity utilisation of over 100% for the last six years. The refineries achieved the highest combined distillate yield of 78.1 wt% during the year, surpassing the previous best of 77.8 wt% in the previous year. They also recorded the lowest ever specific energy consumption of 56.3 MBN during the year. High-sulphur crude processing was maximised and the highest ever percentage of high-sulphur crude (53.3% of the total crude) was processed during the year.

Pipelines

The Corporation''s pipelines continued to deliver significant performance and achieved a throughput of 75.50 million tonnes during the year as against 75.55 million tonnes last year. The product pipelines achieved the highest ever throughput of 28.09 million tonnes and the crude oil pipelines registered a throughput of 47.40 million tonnes as against throughputs of 27.96 million tonnes and 47.59 million tonnes respectively during the previous year. The throughput of the gas pipeline increased by 43%, from 671 MMSCM in the previous year to 960 MMSCM in 2012-13. The total length of your Corporation''s network of crude oil, product and gas pipelines as on 31.03.2013 was 11,214 km.

Marketing

Despite the many challenges faced during the year, the Corporation performed with aplomb, exploiting opportunities with passion, with focus on offering customers better value for money and added benefits through its products and services. The Corporation continued to maintain its leadership in the market with domestic sales of 68.76 million tonnes of petroleum products during the year vis-a-vis 68.10 million tonnes in 2011-12. During the year, the highest ever number of 1910 retail outlets were commissioned, out of which 1050 were Kisan Seva Kendra (KSK) outlets. The KSK outlets contributed about 10% of the total sales of MS and HSD in the retail segment. During the year, 1600 retail outlets were automated, taking the total number of automated retail outlets to 4377.

During the year, the Corporation enrolled 68.9 lakh new Indane LPG customers and commissioned 142 regular LPG distributorships, taking their total to 734.2 lakh customers and 5523 distributors. The Corporation''s focus on reaching out to rural customers continued with the commissioning of 422 Rajiv Gandhi Gramin LPG Vitarak distributorships during the year, taking their total strength to 944. LPG bottling capacity was augmented during the year by 615 thousand metric tonnes per annum raising the total bottling capacity as on 31.03.2013 to 6793 TMTPA. The market share in Auto-LPG sales increased by 2% during the year, with sales of 110.6 TMT.

The Corporation sold 408.5 TMT of finished lubes during the year 2012-13 as compared to 435 TMT in the previous year. The decline in sales is mainly due to unprecedented impact of economic recession during the year resulting in negative growth of 3.4% in the industry compared to average of 2% industry growth during the previous years. Export of SERVO to three new destinations Madagascar, Maldives and Kenya was commenced during the year, expanding the coverage of the brand to 24 overseas markets. During the year, SERVO Futura Synth, a 100% synthetic engine oil, was launched for top-end cars and SUVs.

The Corporation continues to be the market leader in the aviation fuel business with a market share of 63.5% and enjoys leadership in all major segments, such as domestic airlines, international airlines and defence services and scheduled airlines, through its 97 Aviation Fuel Stations across the country.

Assam Oil and IBP Divisions

The Assam Oil Division (AOD) continued to play a vital role in ensuring supply of petroleum products in the north-east region. The Digboi Refinery processed 0.66 million tonnes of crude oil during the year as against 0.62 million tonnes of crude oil processed last year.

The IBP Division, which comprises Explosives and Cryogenic businesses, earned revenue of Rs. 261.00 crore during the year, registering a growth of 31% over the previous year. The highest ever sales of 18,453 cryocans was registered during the year.

RESEARCH & DEVELOPMENT

The year 2012-13 continued to be an eventful year for the Corporation''s R&D Centre at Faridabad. As a major initiative in refinery technology, steps were taken to set up a demonstration unit at Guwahati Refinery based on INDAdeptG technology developed by the R&D Centre for desulphurisation of heavy Indmax gasoline. The efficacy of this adsorbent technology received a fillip before its actual demonstration by way of grant of US patent. Studies carried out for the DHDT unit of Panipat Refinery resulted in significant financial benefits. A new multifunctional additive package has been developed for the mainline engines of pipelines, which demonstrated significant benefits by way of fuel savings.

Lubricant technology research continued to pay rich dividends in terms of new generation product development, with 120 new formulations during the year, resulting in 43 OEM approvals, including approval for a diesel engine oil, marine oil and transformer oil from reputed customers.

A record number of 52 patent applications were filed during the year, while eight patents were granted.

The newly-formed IOC-DBT Bioenergy Research Centre successfully commissioned India''s first ever multi-feed pilot plant for conversion of lignocellulosic biomass to ethanol. On the alternative energy front, the Corporation''s R&D Centre firmed up an agreement with L&T for production of gas ifiers based on its patented ''integrated gasification'' concept. The Corporation also joined the consortium on the National Mission on Clean Coal Technologies (NMCCT) under the Government of India for further collaborative research on gasification with DRDO, CII, L&T and Thermax.

EXPANDING BUSINESS

In line with the Corporation''s Vision of being the ''Energy of India'' and becoming ''a globally admired company'', the Corporation continues to endeavour to extend its business frontiers beyond core refining, transportation & marketing business to related segments across the entire energy spectrum. The investments and monetisation of opportunities in petrochemicals, gas and upstream sectors is part of these efforts.

Petrochemicals

The Corporation is now the second largest player in the domestic petrochemicals market. It is also the market leader in Linear Alkyl Benzene(LAB) used in detergent manufacture, and in Mono Ethylene Glycol (MEG) used in the polyester industry. Polymer sales too recorded a growth of 41.6%. During the year, the Corporation retained its position as the preferred supplier of Purified Terephthalic Acid (PTA) and achieved the highest ever annual sales of 557 TMT

The Corporation''s domestic petrochemical sales recorded a growth of 23.9% and reached the highest ever level of 1.8 MMT during the year. Petrochemical exports reached a new milestone of 108.6 TMT, recording a growth of 42.5%, with Corporation''s reach extending to new markets in Latin America, CIS countries and Europe. Five new grades of Poly-ethylene / Polypropylene were developed in-house for niche application segments to deliver more value to customers.

Gas

The gas business of the Corporation is intent upon leveraging the sizeable opportunities being presented by the country''s growing demand for gas and the increased international gas sourcing opportunities brought on by the international unconventional gas revolution and the Liquefied Natural Gas (LNG) boom. During the year, the Corporation''s gas sales grew by 6.2%, reaching the level of 1.83 MMT. LNG sales through ''LNG at the Doorstep'' model, has been highly successful. During the year, the sales volumes of ''LNG at Doorstep'' increased to 25835 MT, registering a growth of 77%.

The Corporation is currently implementing its first 5-MMTPA LNG import and re-gasification terminal at Ennore near Chennai, which will be the gateway for entry of natural gas into the Southern Indian market. The Corporation is a part of two joint ventures (GSPL India Gasnet Ltd. & GSPL India Transco Ltd.) with 26% equity participation for building of Mehsana-Bhatinda & Bhatinda- Jammu-Srinagar gas pipelines and Mallavaram-Bhopal-Bhilwara-Vijaypur gas pipeline respectively.

Exploration & Production (E&P)

The E&P portfolio of the Corporation consists of 13 domestic and 10 overseas blocks, which include 2 producing assets. The Corporation''s share in the 2P reserves of the producing assets is estimated to be 119 MMBoe of oil & gas. Further, there are 7 blocks with oil & gas discoveries, 2 CBM blocks and 8 other blocks under various stages of exploration. Your Corporation is also sole operator in two on-land exploration blocks in Cambay basin, Gujarat where exploration activities are in progress.

During the year, the Corporation acquired 10% working interest from Carrizo Oil & Gas Inc. (USA) in the Niobrara shale oil producing asset in the State of Colorado, USA with effect from 1st October, 2012. In another overseas asset, Carabobo Project-1 in Venezuela, production of First Oil from the project commenced on 27th December 2012. As of 31st March, 2013, the total production achieved from Carabobo Project-1 is 28,315 barrels, wherein your Corporation''s share is 991 barrels. The total production during 2013 is expected to be about 2 to 3 million barrels, wherein the Corporation''s share would be about 95,000 barrels. Further, in Area 95-96 Libya, where your Corporation has a participating interest of 25%, oil & gas discovery has been reported from the first exploratory well drilled in February, 2013 and further exploratory drilling is in progress.

Alternative Energy

During the year, your Corporation successfully commissioned five wind energy generators (~ 10.5 MW) at Vajrakarur in Andhra Pradesh. This takes the Corporation''s installed wind power capacity in Andhra Pradesh to 27.3 MW and its total installed wind power capacity across India to 48.3 MW. The grid-connected renewable energy generation during the year crossed the 100 GWh mark.

In bio-fuels, your Corporation''s joint venture company, IndianOil-CREDA Biofuels Limited supplied demetaled and degummed Jatropha oil to Chennai Petroleum Corporation Limited for pilot studies on co-processing of vegetable oils for production of green diesel, which was successfully co-processed during the year using the R&D technology developed by the Corporation''s R&D Centre.

Sustainable Development

The ecological footprint of the Corporation''s operations is currently being assessed as a first step towards minimising it. During the year, eco-footprinting exercise was completed at 48 locations, wherein mapping of green house gas emissions, water consumption and waste generation was done on ''as is'' basis. Additionally, during the year, energy audit of office buildings was carried out in 28 locations.

A number of mitigation actions, such as commissioning of rainwater harvesting systems, solarisation of retail outlets, installation of organic waste converters, organising carbon-neutral events, sustainability seminar and conducting awareness generation programmes were initiated during the year. The Corporation''s Sustainability Report 2011-12 with A rating certified by M/s.DNV was also released during the year.

Consultancy Services

The Corporation has been providing consultancy services especially in Africa and the Middle East. Emirates National Oil Company, Dubai extended the technical services agreement and manpower secondment agreement with the Corporation for the 15th consecutive year. During the year, the Corporation through competitive bidding, secured and successfully executed a consultancy assignment for Kuwait National Petroleum Company undertaking Pilot Plant test run of diesel samples aiming at Sulphur reduction to stipulated levels.

INTERNATIONAL TRADE

The Corporation imported 42.53 million tonnes of crude oil amounting to Rs. 1,84,559 crore during the year, as against 43.54 million tonnes amounting to Rs. 1,73,323 crore in the previous year, to meet its requirements through a carefully selected and diversified mix of supply sources. In addition, the Corporation imported crude oil amounting to Rs. 37,279 crore during the year on behalf of Chennai Petroleum Corporation Limited (subsidiary company) as against crude oil amounting to Rs. 36,392 crore in the previous year. The import of petroleum products during the year was 4.26 million tonnes, amounting to Rs. 21,289 crore, as against 4.58 million tonnes amounting to Rs. 20,885 crore in the previous year. The Corporation also exported petroleum and petrochemical products worth Rs. 18,549 crore during the year as against Rs. 19,618 crore in the previous year.

BUSINESS PROCESS OPTIMISATION

The Business Process Optimisation group of the Corporation continued to play a vital role in fine-tuning and optimising crude oil and product procurements and supply chain management. In order to improve refinery margins through reduction in input cost, several initiatives were taken to process new and cheaper crudes. During the year, 10 new opportunity crudes were procured and processed by the Corporation''s refineries. High-Sulphur crude processing also increased from 49.2% to 53.3%. In addition, crude and product inventories were managed through optimum purchases and imports/exports. Investment proposals for new projects were evaluated under various scenarios of demand and prices through optimisation models, which helped in assessing the net impact of the investment on the overall corporate profitability.

INFORMATION SYSTEMS

The Corporation maintained 100% uptime of SAP operations during the year. A smartphone mobile application "mPower'' was launched during the year for retail sales officers in field locations to improve their productivity. The application, built on Android platform, helps the field officers to access MIS reports while on the move.

HEALTH, SAFETY & ENVIRONMENT (HSE)

The Corporation is committed to conduct its business with a strong environment conscience, ensuring sustainable development, safe workplaces and enrichment of the quality of life of its employees, customers and the community at large. All the refineries of the Corporation are certified to ISO:14064 standards for sustainable development as well as for the Occupational Health & Safety Management System (OHSMS/OHSAS-18001), besides having fully equipped occupational health centres. Compliance with safety systems and procedures and environmental laws is monitored at the unit level, divisional level and corporate level. The HSE activities of the Corporation are reviewed in every Board meeting. In addition, the Board Committee on Health, Safety & Environment periodically reviews the HSE activities of the Corporation.

ENERGY CONSERVATION

The Corporation maintains continuous thrust on energy conservation at all of its refineries and units through extensive performance monitoring and by keeping abreast of the latest technological developments and global best practices. As a result of various energy conservation measures undertaken, the energy index in terms of MBN* of the Corporation''s refineries during the year is down to 56.3, which is the best ever achieved, as against the figure of 57 in the previous year. The energy conservation schemes implemented during the year resulted in estimated fuel savings of 120,000 standard refinery fuel tonne (SRFT), valued at about Rs. 450 crore.

*MBN- Thousand British Thermal Unit / Barrel / Energy Factor (MBTU/BBL/ NRGF)

HUMAN RESOURCES

The employee strength of the Corporation was 34,084 as on 31.03.2013; consisting of 14,981 executives and 19,103 non-executives. This includes 2,643 women employees comprising 7.75% of the total workforce. The Industrial relations climate in the Corporation continued to remain harmonious and peaceful during the year. A number of initiatives were taken to improve the effectiveness of your Corporation''s human resource systems and processes. The Corporation continued to provide comprehensive welfare facilities to all members of the IndianOilFamily.

The Corporation believes that participation of employees in management fosters a sense of importance, pride and accomplishment and also enhances the sense of workmanship, innovation and creativity. The Corporation has, therefore, always supported participative culture in management by adopting a consultative approach with the collectives and establishing harmonious relations for enhancing operational efficiency and industrial peace & harmony, leading to higher productivity. Efforts to promote employees'' participation in various activities, like Suggestions Scheme, Quality Circles, welfare, safety, Total Productive Maintenance (TPM), etc. continued during the year. Participation was also ensured through information sharing by the top management with employees on a regular basis, seeking their support, suggestions and co- operation.

In line with its mission statement, the Corporation is committed to diversity and inclusiveness. Women development and gender equality continue to be emphasised by your Corporation. Women employees are rendered support through various initiatives to deal with their dual obligations with optimum results both for them and for the organisation. All women employees have equal opportunities, equal rights and equal responsibilities. Your Corporation''s efforts for women development have been recognised by the Forum of Women in Public Sector as it was adjudged the second best enterprise for women development for initiatives undertaken during the year 2011-12.

The Corporation took landmark initiatives in human resource development during the year. Some of the key initiatives that were implemented include opening up of the Annual Performance Appraisal ratings for viewing by individuals, introduction of Leadership Centres/ multi-rater feedback mechanism for measurement of performance in succession management and leadership management; employee engagement survey; re-opening of the voluntary retirement scheme, etc.

The Presidential Directives and various instructions/guidelines issued by the Government of India with regard to reservation in services for SCs/STs/PH/ OBCs etc. were scrupulously followed. It has been the endeavour of your Corporation to utilise 25% of its community development funds towards Special Component Plan (SCP) and Tribal Sub Plan (TSP) for meeting the needs of the weaker sections. Liaison officers were appointed at various locations/units/ installations all over the country to ensure implementation of Government directives. Reports in the prescribed form relating to representation of SCs/ STs/OBCs is annexed as Report I & II.

The Corporation is implementing the provisions of the Disabilities Act 1995 by way of 3% reservation for physically challenged and disabled persons. In addition, various concessions and relaxations are being extended to physically challenged persons in the recruitment process.

In compliance with the Official Language Act, 1963, Official Language Rules, 1976 and orders issued by the Government of India from time to time, efforts were continued during the year for increasing the progressive use of Hindi in official work. In all offices/units/locations of the Corporation, Committees are functioning for implementing Official Language work effectively and to review the progress of implementation of Official Language policies in the offices as also the Annual Programme as circulated by the Deptt. of Official Language, Govt. of India.

Foreign Tours

The officers of the Corporation undertook 317 foreign tours during the year 2012-13 for business purposes and for attending conferences, seminars and training programmes. The total expenditure on foreign tours was Rs. 8.60 crore.

VIGILANCE

The objective of Vigilance is to ensure maintenance of the highest level of integrity throughout the Corporation. To achieve this objective, the Vigilance group carries out preventive and punitive functions, with greater emphasis on the preventive aspects. During the year, 35 Vigilance Awareness Programmes were conducted, which were attended by over 800 employees. In order to promote transparency and efficiency in the working of the Corporation, various initiatives like e-tendering, bill watch system, standardisation of schedule of rates, file tracking system, etc., were introduced during the year.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) has been the cornerstone of success right from inception of the Corporation and its corporate strategy is aligned to national priorities and envisions a greater societal role in future to accomplish the cherished goal of a truly developed India, where all sections of society live with dignity. The Corporation has been supporting large number of social welfare and community development initiatives. A report on CSR has been incorporated as separate section forming part of the Annual Report.

REMUNERATION TO THE AUDITORS

The Auditors'' remuneration for the year 2012-13 has been fixed at Rs. 93 lakhs plus applicable taxes. In addition to this, reasonable out-of-pocket expenses actually incurred are also reimbursable.

PUBLIC PROCUREMENT POLICY FOR MSMEs 2012

The Corporation is making endeavours to comply with the Public Procurement Policy for MSMEs as per directives of the Govt. of India and necessary steps have been initiated in this regard in all the Divisions of the Corporation.

COST AUDIT REPORT

In accordance with the directives of the Central Government, Cost Auditors were appointed for conducting the Cost Audit of Refineries, Lube Blending Plants, and other units of the Corporation for the year 2012-13. The Cost Audit for the year 2011-12 was carried out for the refineries, lube plants etc. and the Cost Audit report was filed by the Central Cost Auditor with the Central Govt. in the prescribed form within the stipulated time period.

Entertainment Expenses

The entertainment expenses for the year 2012-13 were Rs. 2.96 crore as compared to Rs. 2.46 crore last year.

SUBSIDIARIES

The financial performance of following subsidiaries of the Corporation is as under:-

(Rs. in Crore)

Subsidiary Turnover Net Profit Dividend

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12

Chennai Petroleum 46,842 45,385 (1,767) 62 - 20% Corporation Ltd.

Indian Oil- CREDA 2 0 - - - - Biofuels Ltd.

Indian Oil (Mauritius) Ltd. 1,274 1,192 19 37 6% 6%

Lanka IOC Plc. 3,147 2,557 122 38 - -

IOC Middle East FZE 40 95 3 4 30% 20%

IOC Sweden AB - - (1) 17 - -

IOCL (USA) Inc. 10 - 1 - - -

Summary of Financial Information of Subsidiary Companies for the Financial Year 2012-13 has been incorporated separately in the Annual Report.

REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

In accordance with the Company''s (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, a report on Energy Conservation, Technology Absorption and Foreign Exchange earnings & outgo is annexed.

PARTICULARS OF EMPLOYEES

As per Notification No. GSR 289(E) dated 31st March, 2011 issued by the Ministry of Corporate Affairs, Govt. of India, amending the provisions of the Companies (Particulars of Employees) Rules, 1975 issued in terms of Section 217(2A) of the Companies Act, 1956, Government companies are not required to include the statement of particulars of employees drawing remuneration of Rs. 60 lacs or more per annum, if employed throughout the financial year or Rs. 5 lacs per month, if employed for part of the financial year. The information has not been included as part of the Directors Report as per the said Notification as IndianOil is a Government Company.

BOARD OF DIRECTORS

During the year, the following Directors ceased to be Directors on the Board of the Corporation :-

- Shri Anees Noorani, Independent Director w.e.f. 15.09.2012.

- Smt. Sushama Nath, Independent Director w.e.f. 24.01.2013.

- Dr. (Smt.) Indu Shahani, Independent Director w.e.f. 14.02.2013.

- Prof. Gautam Barua, Independent Director w.e.f. 14.02.2013.

- Shri Michael Bastian, Independent Director w.e.f. 14.02.2013.

- Shri N.K. Poddar, Independent Director w.e.f. 14.02.2013.

- Shri Sudhir Bhargava, Govt. Nominee Director w.e.f. 09.05.2013.

The following Directors were appointed on the Board of the Corporation:

- Dr. S.C. Khuntia, Govt. Nominee Director w.e.f. 9.8.2012.

- Prof. Devang Khakhar, Independent Director w.e.f. 14.09.2012 (afternoon).

- Shri Rajive Kumar, Govt. Nominee Director w.e.f. 02.07.2013.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March 2013, all applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the Directors had 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) that the Directors had prepared the accounts for the financial year ended 31st March 2013 on a ''going concern'' basis.

ACKNOWLEDGEMENTS

The Board of Directors would like to place on record its deep appreciation of the dedicated efforts and valuable services rendered by the members of the IndianOilFamily in the Corporation''s achievements during the year 2012-13. The Board also wishes to thank the Government of India, particularly the Ministry of Petroleum & Natural Gas, and the various State Governments, regulatory and statutory authorities for their valuable guidance and support. The Board is also grateful to all its stakeholders like bankers, investors, customers, consultants, technology licensors, contractors, vendors etc. for their continued support and confidence reposed in the Corporation. The Board wishes to place on record its appreciation of the valuable advice and significant contribution made by Shri Anees Noorani, Smt. Sushama Nath, Dr. (Smt.) Indu Shahani, Prof. Gautam Barua, Shri Michael Bastian, Shri N.K. Poddar and Shri Sudhir Bhargava during their tenure on the Board.

For and on behalf of the Board

Place : New Delhi (R.S. Butola)

Dated : 11th July, 2013 Chairman


Mar 31, 2012

The gives me immense pleasure to present, on behalf of the Board of Directors, the 53rd Annual Report of the Corporation for the financial year ended 31st March 2012, alongwith the Audited Statement of Accounts, Auditors' Report and the Report on the Accounts by the Comptroller & Auditor General of India.

PERFORMANCE REVIEW FINANCIAL

2011-12 2010-11 US$ Million Rs.in Crore US$ Million Rs.in Crore

Turnover 85,550 4,09,957 72,104 3,28,652

(inclusive of Excise Duty)

Gross Profit 4,508 21,600 3,585 16.339 (before Finance Cost, Depreciation Exceptional items and Tax)

Finance Cost 1,168 5,596 587 2,676

Depreciation 948 4,542 1,002 4,567

Profit Before Tax & Exceptional Items 2,392 11,462 1,996 9,096

Exceptional Items 1,609 7,708 NIL NIL

Profit Before Tax 783 3,754 1,996 9,096

Tax Provision (42) (201) 363 1,651

Profit After Tax 825 3,955 1,633 7,445

Appropriations Add:

Insurance Reserve NIL NIL 3 14

Less:

Proposed Dividend 253 1,214 506 2,307

Corporate Dividend Tax 40 194 79 359

Insurance Reserve 4 20 4 20

Bond Redemption Reserve 131 627 22 101

General Reserve 397 1,900 1,025 4,673

PHYSICAL

Million Metric Tonnes (MMT)

2011-12 2010-11

Refineries Throughput 55.62 52.96

Pipelines Throughput 75.55 68.51

Product Sales (incl. of Gas, Petrochemicals & Exports) 75.66 72.92

SHARE VALUE

2011-12 2010-11

US$ Rs. US$ Rs.

Cash Earning per share 0.73 35.00 1.09 49.47

Earning per share 0.34 16.29 0.67 30.67

Book value per share 4.69 238.38 5.11 227.90

DIVIDEND

Your Corporation has been consistently declaring dividend for the past 45 years. To meet the aspirations of shareholders and despite the lower profits during the current year, the Board of Directors has recommended a dividend of 50% i.e. Rs. 5/- per equity share of Rs. 10/- each on the Paid-up Share Capital as against Rs. 9.50 per share in the previous year. So far, your Corporation has paid a cumulative dividend of Rs. 20,882 crore, excluding the dividend of Rs. 1,214 crore payable for the current year subject to the approval by shareholders. The dividend shall be paid to the members whose names appear in the Register of Members as well as in the Beneficial Ownership Position provided by NSDL/ CDSL as on 6th Sept. 2012.

PUBLIC DEPOSIT SCHEME

The Public Deposit Scheme, which was open only for employees and ex- employees of the Corporation, was closed with effect from 31st August, 2009. The total outstanding deposits were Rs.55,000/- as on 31.03.2012.

CONTRIBUTION TO EXCHEQUER

Your Corporation is the largest contributor to the National Exchequer by way of duties and taxes. During the year, Rs.78,914 crore was paid to the Exchequer as against Rs.77,622 crore in the previous year comprising of Rs.29,864 crore paid to the Central Exchequer and Rs.49,050 crore paid to the States Exchequer as against Rs.39.658 crore and Rs.37,964 crore paid in the previous year to Central and State Exchequer respectively.

CONSOLIDATED FINANCIAL STATEMENTS

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

2011-12 2010-11

US $ million (Rs. in crore) US $ million (Rs. in crore)

Turnover (inclusive 80,977 3,88,044 69,026 3,14,621 of Excise duty)

Profit Before Tax 834 3,995 2,219 10,114

Profit after tax 882 4,226 1,718 7,831

CORPORATE GOVERNANCE

The Corporate Governance Report and Management's Discussion & Analysis Report have been incorporated as separate sections forming part of the Annual Report. Your Corporation complies with the Corporate Governance guidelines stipulated by the Stock Exchanges and Department of Public Enterprises (DPE), Government of India.

SECRETARIAL AUDIT

Your Corporation has carried out a Secretarial Audit of its records and documents for the year 2011 -12 as a Good Corporate Governance practice. The Secretarial Audit Report confirms that the Corporation has complied with all the applicable provisions of the Corporate Laws, guidelines, rules etc. The Report, duly certified by a practising Company Secretary, is provided in the Annual Report.

CODE OF CONDUCT

The Board has enunciated a code of conduct for the Directors and Senior Management Personnel of the Corporation, which has been circulated to all concerned and has also been hosted on the website of the Corporation. The Directors and Senior Management Personnel have affirmed compliance with the code of conduct as required under the Corporate Governance guidelines of Clause 49 of the Listing Agreement and DPE guidelines.

OPERATIONAL PERFORMANCE

Refineries

IndianOil's refineries achieved the highest ever crude throughput of 55.62 million tonnes during the year, surpassing the previous best of 52.96 million tonnes achieved in 2010-11. With an overall capacity utilisation of 102.6% for the year, your Corporation has consistently attained a capacity utilisation of over 100% since last five years. The optimum operation of secondary units at all refineries, as well as minimised downtime, has enabled the refineries in achieving the highest combined distillate yield of 77.8 wt%. During the year, high sulphur crude processing was maximised at 49.2% of total crude processed as compared to 45.1% of total crude processed in 2010-11.

Pipelines

IndianOil's pipelines recorded excellent operational performance during the financial year 2011 -12, surpassing all previous records. The pipelines achieved highest ever throughput of 75.55 million tonnes of crude oil and petroleum products as against 68.51 million tonnes in the previous year. The gas pipelines achieved a throughput of 671 MMSCM in 2011-12 vis-a-vis 344 MMSCM in 2010-11. The total network of product, crude and gas pipelines under operation as on 31st March, 2012 is 10,909 KMs.

Marketing

IndianOil continued to retain its market leadership during the year and achieved domestic sales of 68.10 million tonnes of petroleum products (including 1.30 million tonnes sold by AOD) vis-a-vis 65.31 million tonnes in 2010-11 (including 1.22 million tonnes sold by AOD) registering a growth of 4.3%. The retail outlet network crossed the 20,000 mark with the commissioning of 1,205 retail outlets during the year including 731 Kisan Seva Kendra (KSK) outlets totalling 20,575 retail outlets including 4,225 KSKs. Sales through the KSK network registered a growth of 33% in Petrol and 28% in Diesel during the year.

During the year, your Corporation enrolled 57.55 lakh new Indane LPG customers and commissioned 128 new regular LPG distributorships taking their total to 668.2 lakh customers and 5,412 distributors. The Corporation s focus on reaching out to rural customers gained momentum with the commissioning of 377 RGGLV (Rajiv Gandhi Gramin LPG Vitaran) distributorships during the year. LPG bottling plant capacity too was augmented by 667 TMTPA from 5,511 TMTPA in 2010-11 to 6,178 TMTPA in 2011-12.

Your Corporation sold 435 TMT of finished lubes during the year 2011-12 as compared to 4Rs.4 TMT in 2010-11, registering a growth of 2.6% over the previous year The nrnwth in lubes market share was 0 5% amongst the Industry. SERVO Luhns jparhpd 20th global destination with its launch h Bahrain in September 2011.

IndianOil continues to be the market leader in the aviation fuel business with a market share of 61.7% and enjoys leadership in all segments like domestic airlines, international airlines, defence services and scheduled airlines.

Assam Oil and IBP Divisions

The Assam Oil Division (ADD) continued to play vital role in ensuring the supply of petroleum products in Assam. The Digboi refinery processed 0.62 million tonnes of crude oil during the year and sold about 1.30 million tonnes of products in comparison to 0.65 million tonnes of crude processed and 1.22 million tonnes of product sales in 2010-11.

The IBP Division, which comprises explosives and cryogenic business, earned revenue of Rs.215.14 crore during the year registering a growth of 18% over the previous year

RESEARCH & DEVELOPMENT

The year 2011-12 was a very eventful year for IndianOil's R&D Centre as two units based on the in-house technologies developed by R&D Centre were successfully commissioned in Bongaigaon Refinery, one being the DHDT for production of diesel and the other being the Isomerisation unit for production of MS. Further, two other in-house developed technologies viz. Indalin technology and INDAdept technology developed by R&D Centre have been accepted In- principle for demonstration trials at Panipat Refinery and Guwahati Refinery respectively. During the year, 15 Patents were filed. Six Patents were granted, which includes two Indian, one U.K., one U.S.A., one Chinese and one Singapore Patent.

In the lubricant technology development area, endeavours were continued to maintain primacy of the flagship brand - SERVO. The R&D Centre developed 154 product formulations during the year and obtained 63 approvals/ recertifications from Original Equipment Manufacturers (OEMs) / customers / Defence.

Pipeline research group made definitive strides during the year by successfully employing the R&D developed IPIG and CPIG Technologies to inspect pipelines.

During the year, impetus was given to research work in the areas of Bio-fuels and Bio-energy with the execution of a Memorandum of Agreement with the Department of Bio-technology, Govt, of India for setting up an advanced Bio- energy Research Centre. In solar thermal area, tri-partite MOC has been signed with IIT- Rajasthan and BHEL.

EXPANDING BUSINESSES

Exploration & Production

Your Corporation has not only been increasing it's presence in the upstream sector, but has also been enhancing its capability in E&P field. Presently, your Corporation has participating interest (PI) in 13 domestic and 9 overseas blocks. In some of these blocks discoveries have been made and in many others geological and geophysical (G&G) studies are in progress. Under IMELP-IX, your Corporation, in consortium with OIMGC Ltd., as operator, has been awarded one Cambay on-land exploration block. In line with your Corporation's endeavour to establish itself as an upstream operator in its two Cambay on-land blocks with 100% participating interest, the first ever IndianOil's own E&P data interpretation centre "ANWESHAN" has been set up.

Gas

During the year, gas sales registered a significant growth of 27% with sales of 2.90 MMT (includes 1.18 MMT for internal consumption) as against 2.28 MMT (includes 0.64 MMT for internal consumption) in the previous year. Ownership of gas receiving terminal, storage and transportation infrastructure is critical to gas business. Consequently, a major milestone was achieved by signing of Heads of Agreement with Tamil Nadu Industrial Development Corporation Limited (TIDCO) for the formation of a JV for IndianOil's first LNG Terminal at Ennore in Tamil Nadu with 5 MMTPA capacity. Your Corporation is also one of the participants in a consortium alongwith GSPL, BPCL & HPCL to build three cross-country gas pipelines through a joint venture for which Joint Venture Agreements have been executed. The gas pipelines will have initial gross capacity of 96 MMSCMD and will have a combined length of 4,150 KMs. LNG Sales through 'LNG at Doorstep' model, pioneered by your Corporation, has recorded encouraging performance and during the year, the sales volumes increased to 14.6 TMT, registering a year-on-year growth of 82%.

Petrochemicals

India is amongst the fastest growing petrochemicals markets in the world and your Corporation views Petrochemicals as a prime driver of future growth. The Corporation has already established world scale mega petrochemicals plants - LAB, PX/PTA and Naphtha Cracker at its Refineries. During the year IndianOil sold 1.473 MMT of petrochemical products in the domestic market, registering a 62% growth. During the year, four new grades of polymers were launched and 15 OEM approvals were obtained for Polymer products. IndianOil's petrochemicals export witnessed record sales of 76 TMT in 2011-12 against 30TMT during 2010-11. IndianOil's petrochemical products like LAB. Polymers and PTA were exported to various countries. The export of Polymer to Pakistan by road during the year was the first movement of Polymer export consignment to Pakistan from any Indian supplier. A robust logistics model and various customer-centric marketing initiatives have resulted into your Corporation's growing market presence in the Petrochemicals sector. During the vear. a world class Product Application & Development Centre IPADC) became fully functional. The 120 KTA Styrene Butadiene Rubber (SBR) plant at Panipat in Joint Venture with TSRC of Taiwan & Marubeni of Japan is in advance stage of implementation.

Consultancy

Your Corporation continues to provide expertise to Emirates National Oil Company (ENOC) under the Manpower Secondment Agreement (MSA) with

ENOC and has also been awarded a consultancy assignment from Kuwait National Petroleum Company (KNPC). Through International bidding process, your Corporation bagged order to conduct training programmes at Kuwait Petroleum Corporation (KPC), Kuwait on downstream hydrocarbon sector.

Exploring Energy Alternatives

Your Corporation aims to contribute to the National energy security and reducing the eco footprints (carbon, water and waste) of its operations by exploiting the domestic renewable energy resources and participating in the country's nuclear energy initiatives. During the year, the Corporation's GRI-G3 compliant Sustainability Report - 'Inclusive Offering' was released.

Your Corporation has successfully commissioned a 5 MW Solar PV Power Project under the Jawaharlal Nehru National Solar Mission (JNNSM), Phase-I at Village Rawra, Jodhpur, Rajasthan. The Corporation's second wind power project of 48.3 MW capacity is under implementation in Andhra Pradesh. During the year, first wind power project of 21 MW in Gujarat was registered as Clean Development Mechanism Project under the United Nations Framework Convention on Climate Change (UNFCCC).

Your 'OnrDoration continued with bio-diesel (Jatropha) plantation projects in three states, viRs.. Chhattisgarh, Madhya Pradesh and Uttar Pradesh and 1.3 lakh man days were generated through plantation initiatives during the year.

INTERNATIONAL TRADE

To meet its requirements of Crude Oil and Petroleum products through a carefully selected and diversified mix of supply sources, the Corporation imported 52.64 million tonnes of crude oil amounting to Rs. 2,09,715 crore as against 50.44 million tonnes amounting to Rs. 1,45.983 crore in previous year. The import of petroleum products during the year was 4.58 million tonnes amounting to Rs. 20,885 crore as against 5 57 million tonnes amounting to Rs. 19,565 crore in the previous year. IndianOil also exported petroleum and petrochemical products worth Rs. 19,636 crore during the year as against Rs. 16,781 crore in the previous Year.

BUSINFSS PROCFSS OPTIMIZATION

The Business Process Optimization Group has been playing an important role in fine-tuning the supply chain management of your Corporation. To reduce input costs, several initiatives were taken to process new and cheaper crudes and in the process improving the existing crude basket through procurement of opportunity crudes. Investment proposals were rigorously evaluated under various scenarios of demand and prices with the help of models providing the net impact of the investment on the total corporate profitability. To reduce logistics costs and improve infrastructure, optimization studies were carried out on new pipelines and existing bottling plants.

INFORMATION SYSTEMS

Your Corporation has ensured 100% uptime of SAP Operations during the period in the payroll project incorporating uniform practices across the organisation. The existing e-Payments process has been extended to more Banks and over 98.5% of payments were made through the electronic mode. Similarly, around 85% of total collections from the customers were made through an e-Collection module. The e-Tendering application was also adopted as a procurement solution which enabled significant efficiencies.

As a step towards better customer service, SMS / IVRS based indenting system was successfully launched for seamless sales operations. The entire planning process for Lube sales is being managed through an optimised package connecting Lube Plants to the supply chain. With the prestigious ISO/IEC 27001 Certification for Information Security Management System and ISO/IEC 20000 Certification for IT Services Management, your Corporation has been benchmarking its Information System practices to international standards.

HEALTH, SAFETY & ENVIRONMENT

Your Corporation's leadership in Health. Safety & Environment (HS&E) is demonstrated by the effective implementation of its HS&E policy. The implementation of HSE policy is vigorously pursued and driven by the departments constituted at the Divisional level. All IndianOil Refineries are certified for ISO:14064 standards for sustainable development as well as for the Occupational Health & Safety Management System (OHSMS/OHSAS- 18001), besides having fully equipped Occupational Health Centres. The safety systems are audited and all IndianOil refineries have environmental management systems certified to tSO-14001. The Corporation is the only petroleum company in India with largest network of ISO accreditations, which include accreditation for refineries, pipelines, R&D, aviation fuel stations, quality control laboratories, LPG bottling plants and tap-off terminals.

Our commitment to conduct business with a strong environment conscience ensures sustainable development, safe workplaces and enrichment of the quality of life of employees, customers and the community. Compliance of safety systems and procedures and environmental laws is monitored at the Unit level, Divisional level and the Corporate level. The facilities are continuously upgiaded to meet future needs in the pursuit of lowest possible discharge. The Board Committee on Health, Safety & Environment periodically reviews the HS&E activities of the Corporation. Several capability building workshops and training programmes on a range of safety topics were conducted in all Divisions. A book on 'Corporate Guidelines on Healthy Lifestyle, Nutrition and Occupational Health' was also released during the year The Corporation also offers its consultancy services to clients' who intend to build a safe, healthy and clean work environment.

ENERGY CONSERVATION

Your Corporation continuously gives thrust on energy conservation at all its refineries and units through extensive performance monitoring and by keeping abreast with the latest technological developments and global best practices. As a result of various energy conservation measures undertaken, the energy index in terms of MBN of IndianOil refineries during the year came down to 57, the best ever achieved and as against the energy index of 59 in the previous year. The energy conservation schemes implemented during the year resulted in fuel savings of about 95,800 Standard Refinery Fuel Tonne (SRFT), valued at about Rs.340 crore. In addition, your Corporation also spreads the message of energy conservation through meets and seminars besides conducting campaigns tor retail and bulk consumers

*MBN-Thousand British Thermal Unit / Barrel / Energy Factor (MBTU/BBL/ NRGF)

HUMAN RESOURCES

The strength of employees of Corporation stood at 34 233 as on 31.03.2012; comprising 14.851 executives and 19 382 non-executives This includes 2,682 women employees comprising 7.83% of the total work toiee.

The successful journey of IndianOil during last five decades conjures up to a kaleidoscope of exciting stories dedicated to the services rendered by our human resources. IndianOil People over the years have created a unique culture distinguished by its venerable tradition and capability to withstand the unceasing hardships with deep-rooted passion.

The industrial relations in the Corporation continued to remain harmonious and peaceful during tire year.

Employees' Participation in Management is an essential ingredient of Industrial democracy, which implies mental and emotional involvement if employees in the management of enterprise. IndianOil has always supported the participative culture in the management through consultative apian with the collectives for industrial peace and harmony leading to higher productivity. The efforts to promote employees' participation in various activities like Suggestion Scheme, Quality Circles, Welfare, Safety, Total Productive Maintenance (TPM) etc. were continued during the year. IndianOil Suggestion Scheme aims at harnessing the latent creativity in every individual, thereby fostering amongst the employees a sense of achievement, a feeling of participation and involvement in the growth of the organization. To improve performance & monitoring of the suggestion scheme and to make it more user friendly, the suggestions are accepted online through e-suggestion portal.

To infuse fresh talent, the Corporation recruited about 700 executives in 2011 - 12. Professionals were recruited from varied specialised fields with a view to meet the specialised skill requirement. A manpower study was undertaken for scientific workforce planning and for establishing norms for manpower deployment.

Succession Management study was conducted to identify different leadership positions, define competencies for them and evaluate the competency level of the executives though assessment centres.

A study has been initiated on "Woman Development initiatives in the Corporation to assess the impact on professional growth of woman in IndianOil". The study will also attempt to develop a multiple criteria for measuring success in true integration of women in their multiple roles.

The Presidential Directives and various instructions/guidelines issued by Government of India regarding reservation in services for SC/ST/PH/OBCs etc. are scrupulously followed. It has been our endeavour to utilize 25% of Community Development funds towards Special Component Plan (SCP) and Tribal Sub Plan (TSP) for meeting the needs of weaker sections. Liaison Officers were carefully chosen and appointed at various locations/units/installations all over the country to ensure implementation of Government Directives. A report in the prescribed form relating to representation of SCs/STs/OBCs are annexed as Report I & II.

In compliance of the Official Language Act, 1963, Official Language Rules, 1976 and orders issued by Government of India from time to time, efforts were made during the year for increasing the progressive use of Hindi in Official work. Official Language Implementation Committees are functioning in all Offices/Units/locations of IndianOil for implementing Official Language effectively and to review the progress of implementation of Official Language policies in the offices as also the Annual Programme as circulated by the Deptt. of Official Language.

Foreign Tours

IndianOil officers undertook 524 foreign tours during 2011-12 for business purposes and for attending conferences, seminars and training programmes. The total expenditure on foreign tours was Rs.9.86 crore.

VIGILANCE

The objective of Vigilance as an organisational function is to ensure maintenance of the highest level of integrity throughout the Corporation. To achieve this - objective, the Vigilance group carries out both preventive and punitive functions and while doing so places greater emphasis on the preventive aspects. During the year, 42 Vigilance Awareness Programmes were conducted. Training programmes on 'Fostering Ethical Management through Vigilance' were organised on all-India basis. With a view to enthuse and provide a fillip to the customer confidence a large number of joint surprise inspections were also conducted, along with the oil industry, on the dealers/distributors network to check Quality & Quantity of products.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) has been the cornerstone of success right from inception stage of IndianOil and its entire corporate strategy is aligned to national priorities and envisions a greater societal role in future to accomplish the cherished goal of a truly developed India, where all sections of society live with dignity.

IndianOil's CSR Policy Evolution: Since inception in 1964, IndianOil has been supporting large number of social welfare and community developmental initiatives. Currently, the Corporation has an avowed policy of setting aside upto 2% of its Retained Profit of the previous year towards Corporate Social Responsibility activities.

During the year 2011-12, your Corporation's CSR expenditure was Rs.82.73 crore. The key CSR initiatives of the Corporation are as under:

1. Health & Medical Care

Flagship Health and Medical care CSR initiative - IndianOil's flagship rural healthcare CSR initiative IndianOil Sachal Swasthya Seva, aims to bring primary healthcare closer to the rural India and provide free consultation and free medicines through Mobile Medical Units (MMUs) linked to Kisan Seva Kendras (KSKs), small format rural petrol pumps of IndianOil. Each MMU travels to the villages in the vicinity of each of the assigned KSKs and treats about 100 patients every day. '

About 1.5 million patients will be benefited each year through these MMUs. The MWIUs will also create awareness through Information, Education and Communication modules on various issues like Family Planning, Health & Hygiene, HIV/AIDs, etc. This Scheme is being operated in villages where no adequate health care facility is currently available. IndianOil is implementing the scheme through M/s Wockhardt Foundation.

IndianOil-TATA Care Centre, Kolkata: IndianOil has partnered with Tata Medical Center, Kolkata to construct a new Cancer Care Centre named as IndianOil - TATA Care Centre with a capacity of 250 beds at its existing hospital. The project will primarily benefit the underprivileged cancer patients from East and North-Eastern States, who cannot afford treatment.

50-bed Swarna Jayanti Samudaik Hospital, Mathura: In the year 1999, IndianOil set up a 50 bed Swarna Jayanti Samudaik Hospital at Mathura, Uttar Pradesh (near Mathura Refinery of IndianOil) for providing medical assistance to the residents of the area. In addition, two mobile dispensaries have been set up to provide primary medical care in the nearby villages of Mathura Refinery.

200-bed Hospital at Digboi, Assam: In the year 1906, Assam Oil Division of IndianOil set up a 200-bed hospital at Digboi for the benefit of the people of the area. It also serves as a tertiary referral hospital in the districts of Tinsukia and Digboi and also parts of Arunachal Pradesh, right upto the areas bordering nearby Myanmar. It is the only hospital of its size with specialized medical facilities in this part of the country.

Other initiatives in Health & Medical Care: Other health and medical care areas, for which IndianOil has been extending support, include Medical/Health Camps on Family Planning, Immunization, HIV/AIDS awareness, Pulse Polio, Eye, Blood Donation, ambulances to Medical Centers/Hospitals/NGOs, hearing aids/ wheel chairs to physically challenged, financial assistance /medical equipments to hospitals, etc.

2. Education

Assam Oil School of Nursing, Digboi: Assam Oil School of Nursing, established in the year 1986, offers a three year diploma course in General Nursing and Midwifery, recognized by the Indian Nursing Council. Till date, about 300 girls have obtained diploma in Nursing and Midwifery courses,

IndianOil Scholarship Schemes: Since 1984-85, IndianOil has been operating a Scholarship Scheme for the poor and deserving students. IndianOil awards 2600 Scholarships on merit-cum-means basis to students pursuing full-time courses in 10 /ITI, Engineering, Medical and Business Administration to nurture and support talent among the deserving students belonging to families with less than Rs. 1 lakh gross joint annual income. 50% scholarships are reserved for SC, ST and OBC students, 25% for girl students and 10% to Persons with Disabilities (PWD) in each category/sub-category.

IndianOil Sports Scholarship Scheme: IndianOil instituted the Sports Scholarship Scheme from the year 2006-07 for promising young sports persons representing State in team games and National ranking in others. At present, 150 scholarships in 10 games/sports are awarded to upcoming junior players up to 19 years of age.

Other Educational initiatives: Expansion of education is one of the CSR thrust areas in IndianOil, which include construction of school buildings/hostels, providing furniture, financial assistance, computers, books, laboratory equipment, distribution of mid-day meals to Govt. School children etc.

3. Clean Drinking Water

Activities undertaken under "Clean drinking water" include installation of submersible pumps, tube wells, construction of elevated water tanks, providing water tap connection, water purifiers / water coolers to schools/ community centre etc. in the villages around IndianOil's installations.

4. IndianOil Foundation

IndianOil Foundation (I0F), a non-profit Trust, was formed in the year 2000 to protect, preserve and promote the national heritage, in collaboration with

Archaeological Survey of India (ASI) and National Culture Fund (NCF) of the Government of India.

Currently, work for development of tourist friendly facilities at Sun Temple at Konark, Odisha and Khajuraho, MP are in progress. The development plans for other monuments Vaishali and Warangal fort are in various stages of planning.

5. LPG Scheme

IndianOil has contributed 20% of 2% of previous year's Net Profit towards release of one-time grant to Below Poverty Line (BPL) families in the rural areas for release of new LPG connection under Rajiv Gandhi Gramin LPG Vitaran Yojana.

6. National Cause/Natural calamities

IndianOil responds proactively to provide aid and relief to the victims of natural calamities like floods, earthquake, cyclones etc. During the year, IndianOil contributed to Sikkim and Odisha Chief Minister's Relief Funds. IndianOil also contributes for national causes in the benefit of the nation viz setting up of educational institutions of national importance like the Rajiv Gandhi Institute of Petroleum Technology (RGIPT).

REMUNERATION TO THE AUDITORS

The Auditors' remuneration for the year 2011-12 has been fixed at Rs.93 lakhs plus applicable taxes. In addition to this, reasonable out-of-pocket expenses actually incurred are also reimbursable.

COST AUDIT REPORT

In accordance with the directives of the Central Government, Cost Auditors were appointed for conducting the Cost Audit of IndianOil's Refineries and Lube

Blending Plants for the year 2011-12. The Cost Audit for the year 2010-11 was carried out for the refineries and lube plants and the Cause Audit reports were tiled by the Cost Auditors with the Central but. during September. 2011, i.e., within the prescribed time period of 18U days from the close of financial year 2010-11.

Entertainment Expenses

The entertainment expenses for the year 2011-12 were t2.39 crore as compared to Rs.2.34 crore last year.

SUBSIDIARIES

The financial performance of following subsidiaries to the Corporation during 2011-12 is as under:

(Rs. in Crore)

Subsidiary Total Net Dividend Turnover Profit

Chennai Petroleum 45,385 62 20% Corporation Ltd.

Indian Oil (Mauritius) Ltd. 1,192 37 6%

Lanka IOC Pic. 2,557 38 -

IOC Middle East FZE 95 4 20%

Summary of Financial Information of Subsidiary Companies for the Financial Year 2011-12 has been incorporated separately in the Annual Report.

REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

In accordance with the Company's (Disclosure of Particulars in the Report of Board of Directors) Rule, 1988, a report on Energy Conservation, Technology Absorption and Foreign Exchange earnings & outgo is annexed.

PARTICULARS OF EMPLOYEES

The particulars of employees pursuant to Section 217(2A) of the Companies Act, 1956 and Rules framed thereunder are annexed.

BOARD OF DIRECTORS

The following Directors ceased to be Directors on the Board of the Corporation consequent upon their superannuation / completion of term:

- Shri B.N. Bankapur, Director (Refineries) on 31.08.2011.

- Shri 6.C. Daga, Director (Marketing) on 30.09.2011.

- Shri K.K. Jha, Director (Pipelines) on 31.01.2012.

- Shri RK. Sinha, Govt. Nominee Director on 29.02.2012.

- Prof. (Dr.) Indira J. Parikh, Independent Director on 29.03.2012 The following Directors were appointed on the Board ot the Corporation:

- Shri Rajkumar Ghosh, Director (Refineries) w.e.f. 01.09.2011.

- Shri M.Nene, Director (Marketing) w.e.f. 05.10.2011.

- Prof. V.K.Bhalla, Independent Director w.e.f. 30.01.2012.

- Shri V.S.Okhde, Director (Pipelines) w.e.f. 01.02.2012

- Smt. Shyamala Gopinath, Independent Director w.e.f. 29.03 2012

- Smt. Sushama Nath, Independent Director w.e.f. 29.03.2012

- Shri Shyam Saran, Independent Director w.e.f. 29.03.2012

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under the Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31 st March 2012, all applicable accounting standards have been followed along with proper explanations relating to material departures:

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and piudemsu to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the Directors had 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) that the Directors had prepared the accounts for the financial year ended 31 st March 2012 on a 'going concern' basis.

ACKNOWLEDGEMENTS

The Board of Directors would like to place on record its deep appreciation of the valuable services and dedicated efforts of the members of the IndianOil family in the Corporation's achievements during the year 2011-12. The Board also wishes to thank the Government of India, particularly the Ministry of Petroleum & Natural Gas, and the various State Governments, regulatory and statutory authorities for their valuable guidance and support. The Board is also grateful to the Corporation's bankers, investors, customers, consultants, technology licensors, contractors and vendors for their continued support and confidence reposed in the Corporation. The Board wishes to place on record its appreciation for the commendable performance and significant contribution made by Shri B.N.Bankapur, Shri G.C.Daga, Shri K.K.Jha, Shri PK.Sinha and Prof. (Dr.) Indira Parikh during their tenure on the Board.

For and on behalf of the Board

(R.S. Butola)

Chairman

Place : New Delhi

Dated : 27.07.2012


Mar 31, 2010

On behalf of the Board of Directors, it is my privilege to present to you the 51st Annual Report on the business and operations of the Corporation for the financial year ended 31s1 March, 2010 along with the Audited Statement of Accounts, Auditors Report and the Report on the Accounts by the Comptroller & Auditor General of India.

PERFORMANCE OVERVIEW

FINANCIAL

2009-10 2008-09 US$ Million Rs in Crore US$ Million Rs. in Crores

Turnover (inclusive of Excise Duty) 57,116 271,074 62,043 285,398

Gross Profit (before Interest, Depreciation and Tax) 3,976 18,872 2,461 11,319

Interest Payment 321 1,526 859 3,952

Depreciation 683 3,240 660 3,038

Profit Before Tax 2,972 14,106 942 4,329

Tax Provision 818 3,885 300 1,379

Profit After Tax 2,154 10,221 642 2,950

Balance brought forward from last yearsaccount 1,118 5,305 1,153 5,305

Profit available for appropriation 3,272 15,526 1,795 8,255

Appropriations

Add:

Insurance Reserve utilised (4) (22) - -

Less:

Proposed Dividend 665 3,156 198 910

Corporate Dividend Tax 107 509 34 155

Insurance Reserve 4 20 2 10

Bond Redemption Reserve (56) (269) 118 540

General Reserve 2,556 12,132 290 1,335

Balance carried to Balance Sheet NIL NIL 1,153 5,305

PHYSICAL

Million Metric Tonnes (MMT)

2009-10 2008-09 Product Sales (incl. of Gas, Petrochemicals & Exports) 69.920 66.757

Refineries Throughput 50.696 51.367

Pipelines Throughput 65.007 59.627

SHARE VALUE

2009-10 2008-09

US$ Rupees US$ Rupees

Cash Earning per share* 1.17 55.44 0.54 24.66

Earning per share* 0.89 42.10 0.26 12.15

Book value per share* 4.64 208.21 3.57 181.22

* EPS & Book value figures of the previous year have been recast upon issuance of bonus shares.

CHANGE IN PAID-UP SHARE CAPITAL

Keeping in view the aspirations of the shareholders, your Corporation rewarded its shareholders by issuance of bonus shares in the ratio of 1:1 i.e. one new bonus equity share of Rs.10 each for every one existing equity share of Rs.10 each in November, 2009. Consequently, the paid-up Share Capital of the Corporation has increased from Rs.1,213.98 crore to Rs.2,427.95 crore.

DIVIDEND

Your Corporation has been consistently declaring dividend for the past 44 years. This year the Board of Directors have recommended a dividend of Rs.13 per equity share of Rs.10 each on the post-Bonus paid-up Share Capital, as against Rs.7.50 per share in the previous year. So far, your Corporation has paid a cumulative dividend of Rs.15,419 crore excluding a dividend of Rs.3,156 crore payable for the current year subject to the approval by shareholders.

PUBLIC DEPOSIT SCHEMES

The Public Deposit Scheme, which was open only for employees and ex-employees of the Corporation, is closed with effect from 31st August, 2009. The total outstanding deposits amount to Rs.75,000 as on 31.03.2010.

CONTRIBUTION TO EXCHEQUER

Your Corporation makes enormous contribution to the Exchequer in the form of duties and taxes. During the year, Rs.57,680 crore was paid to the Exchequer as against Rs.57,529 crore in the previous year. Out of this, Rs.26,541 crore was made to the Central Exchequer and Rs.31,139 crore to the States Exchequer.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India, your Corporation has prepared the Consolidated Financial Statements of its subsidiaries and joint venture entities. The highlights of the Consolidated Financial Results are as follows:

(Rs. in Crore)

2009-10 2008-09

Turnover (inclusive of Excise duty) 2,59,360 2,71,412

Profit Before Tax 15,049 3,649

Profit for the Group (after tax) 10,713 2,599

MAHARATNA STATUS

IndianOil has been conferred with the Maharatna status by the Government of India which provides enhanced autonomy and larger flexibility for its operation. However, the Maharatna powers can be invoked only on the induction of the requisite number of Independent Directors on the Board of IndianOil in compliance with SEBI guidelines and the Listing Agreement. The matter is being pursued with the Government of India.

CORPORATE GOVERNANCE

The Corporate Governance Report and Managements Discussion & Analysis Report have been incorporated as separate sections, forming part of the Annual Report as stipulated under Clause-49 of the Listing Agreement with the Stock Exchanges. IndianOil also complies with the Corporate Governance guidelines enunciated by the Department of Public Enterprises, Government of India for Government Companies.

The Ministry of Corporate Affairs, Govt, of India has issued a set of voluntary guidelines on Corporate Governance in December 2009. The guidelines provide for good governance practices which may be adopted by corporates voluntarily. IndianOil complies with most of the provisions of the guidelines and would endeavour to comply with the other provisions that are within the domain of a Government Company.

SECRETARIAL AUDIT

As a good Corporate Governance initiative, IndianOil has voluntarily carried out Secretarial Audit through a Practising Company Secretary for the year 2009-10. The report confirms that the Company has complied with all the applicable provisions of the Corporate Laws, guidelines rules etc. This is also in line with the provisions of voluntary guidelines on Corporate Governance issued recently by the Ministry of Corporate Affairs.

CODE OF CONDUCT

The Board has enunciated a code of conduct for the Directors and senior management personnel of the Corporation, which has been circulated to all concerned and has also been hosted on the website of the Corporation. The Directors and senior management personnel have affirmed compliance with the code of conduct.

OPERATIONS Refineries

IndianOils refineries achieved a crude throughput of 50.696 million tonnes during the year, as against 51.367 million tonnes during 2008-09, which was marginally lower due to planned shutdown of Gujarat, Mathura and Haldia Refineries to carry out revamp jobs and hook-up required for MS / HSD Quality Upgradation as per Bharat Stage-Ill / IV norms. Despite major planned Maintenance & Inspection shutdowns, the Refineries together achieved capacity utilisation of 102% for the third consecutive year and the highest ever overall distillate yield of 75.3 wt%. The specific energy consumption for all Refineries together was 62 MBN* which is the lowest ever and much below the industry average of 68 MBN. IndianOil refineries also achieved record overall production of MS and ATF during the year.

In line with the Governments Auto Fuel Policy for supplying Bharat Stage-IV quality MS and HSD in 13 Indian cities, the refineries at Panipat, Mathura and Haldia successfully produced and despatched the products in January 2010 itself beating the deadline of 1s February 2010, after commissioning the respective Quality Improvement Projects. Implementation of Quality Improvement Projects at other refineries is also in full swing and is expected to be commissioned progressively.

Pipelines

During the year, the Pipelines Division registered an outstanding performance of the highest-ever operational throughput of 65.007 million tonnes of crude oil and petroleum products as against 59.627 million tonnes in the previous year. Your Corporation owns and operates the largest network of crude oil and product pipelines in India. With the commissioning

{"MBN- Thousand British Thermal Unit/Barrel/Energy Factor (MBTU/BBUNRGF))

of the Chennai-Bangalore Product Pipeline, the total network of pipelines as on 31s1 March 2010 is 10,541 km with a capacity of 75.26 million tonnes. Marketing

During the year, IndianOils Marketing Division sold 63.030 million tonnes of petroleum products as against 60.887 million tonnes in the previous year, registering a growth of 3.52%. IndianOil maintained its lead in the highly competitive bulk consumers segment, while the retail segment too registered robust growth. Your Corporation commissioned 238 new retail outlets and 414 Kisan Seva Kendra (KSK) outlets during the year taking their total tally to 18,643.

IndianOil continued to dominate the market in respect of branded fuels. The XTRAPOWER usage in value terms grew by 22%. To further consolidate its leadership in the bulk consumers segment, your Corporation commissioned 258 new consumer pumps during the year taking their total to 7593.

IndianOils Indane LPG brand earned the coveted status of Superbrand during the year. On the lines of KSK, the Rajiv Gandhi Grameen LPG Vitarak Yojana was launched to penetrate rural markets. Your Corporation enrolled about 41 lakh new Indane customers and the cumulative Indane population reached 568 lakh. About 110 new Indane distributorships were commissioned during the year, raising their total number to 5,095.

Your Corporation achieved the highest-ever finished lube sales of 407 TMT during the year registering a growth of 8.8% over the previous year. Export of finished lubricants and base oil grew by 42% as compared to the previous year, which is an exceptional performance.

IndianOil gained sales volume & new business and consolidated its leadership position in the aviation fuel business with a market share of almost 63%. Your Corporation continued to meet the aviation fuel requirements of the defence services, national carriers, scheduled private airlines and international airlines. IndianOil met the entire requirement of aviation fuels of the Navy, Army and over 90% of Indian Air Force.

ASSAM OIL DIVISION

The Digboi Refinery of Assam Oil Division (AOD) processed 0.600 million tonnes of crude oil during the year. AOD sold about 1.142 million tonnes of products and retained its position as the market leader in the North East. Its marketing network comprises of 447 retail outlets, 394 SKO/LDO dealerships and 412 Indane distributors. AOD reaches Indane gas to 3.09 million customers across 190 towns in the region.

RESEARCH & DEVELOPMENT

IndianOils Research & Development Centre developed 181 product formulations during the year. The year was marked with 65 approvals from Original Equipment Manufacturers (OEMs) / Customers. The Centre carried out successful plant trials of in-house developed catalysts in the Guwahati, Haldia and CPCL Refineries. IndianOil received OIDB grant of Rs. 88 crore for demonstration of a novel adsorption-based fuel desulphurisation technology developed by its R&D Centre. It is the biggest ever Government grant for demonstration of an indigenously developed technology.

In alternative fuels research, lifecycle assessment of the use of bio-diesel from Jatropha in State Transport application was completed in collaboration with the National Renewable Energy Laboratory (NREL), USA.

For the first time, efficacy of modified OiliVorous-S technology for bio- remediation of oily sludge was successfully demonstrated for marine application for bio-remediation of oil spillage caused by a sinking ship (Black Rose) at Paradip Port.

The R&D Centre filed a total of 18 patents (including 3 in the US) out of which, eight patents (including two US patents) were granted. With this, IndianOil now has a portfolio of 215 active patents. During the year, 15 MoUs were signed with various reputed academic and research organisations for undertaking collaborative research.

A special scheme has been introduced for offering sabbatical to employees to facilitate increased interaction & R&D collaboration between industry and academia, for which IndianOils R&D Centre will be the nodal agency.

IBP DIVISION

IBP Division, which comprises of Explosives and Cryogenics Business Groups, sold 57,645 tonnes of explosives, registering a growth of 12.5%. The Cryogenics Group sold 16,366 Cryo containers and 55 industrial containers during the year.

PROJECTS

Project implementation is accorded the highest priority by your Corporation and best endeavours are made to avoid time and cost overruns. The status of the projects, is as under:

Completed Projects

- Naphtha Cracker & downstream Polymer Units at Panipat.

- Installation of facilities for Distillates Yield (Hydrocracker) at Haldia Refinery and capacity increase from 6 MMTPA to 7.5 MMTPA.

- MS/HSD Quality Upgradation Projects at various refineries.

- Bijwasan-Panipat Naphtha Pipeline

- Augmentation of Mundra-Panipat Pipeline from 6 to 9 MMTPA.

- Chennai-Bangalore Product Pipeline

- Dadri-Panipat R-LNG Spurline.

- Grassroots depot commissioned in Zewan, Srinagar.

- Retail Outlets Automation (Phase 1) Ongoing Projects

- 15 MMTPA grassroots refinery at Paradip, Orissa

- Panipat Refinery Additional Expansion Project

- Diesel Hydro Treatment Project at Bongaigaon Refinery

- Branch Pipeline from Viramgam to Kandla

- Paradip-Sambalpur-Raipur-Ranchi Pipeline

- Integrated crude oil handling facilities at Paradip

- New TOP at Jasidih, Jharkhand

- Retail Outlets Automation (Phase 2) New Projects:

- Butadiene Extraction Unit project at Panipat

- Sanganer-Bijwasan Product Pipeline

- Paradip-Haldia-Durgapur LPG Pipeline

- Augmentation of Paradip-Haldia-Barauni Pipeline

BUSINESS DEVELOPMENT

During the year 2009-10, Business Development opportunities across the entire value chain of the hydrocarbon sector continued to receive focussed attention and thrust. Strategic initiatives were guided by IndianOils long- term vision. The year gone by witnessed some major achievements.

Exploration and Production (E&P)

Your Corporation presently has participating interest in 11 blocks within the country, including two Coal Bed Methane (CBM) blocks, and nine overseas blocks - in Libya, Iran, Yemen, Nigeria, Gabon and Timor-Leste. Exploration activities are at different stages of progress.

IndianOil has been awarded a project for the development, extraction, upgradation and marketing of heavy oil in Carabobo heavy oil region of Venezuela in consortium with Repsol, Petronas, ONGC Videsh Ltd. and Oil India Ltd.

During the year, IndianOil was granted the Petroleum Exploration License for one of the two Type-S blocks in Cambay basin for which it is the operator. Upon getting the license, exploration activities were initiated in the block. Under the eighth NELP bidding round conducted in 2009 by the Government of India, two blocks have been provisionally awarded to your Corporation along with consortium partners. Consultancy Services

In a visible recognition of IndianOils expertise, the Manpower Secondment Agreement and Technical Services Agreement with Emirates National Oil Company, Dubai, was extended for the 12th and 13th consecutive years respectively. During the year, IndianOil was selected as a qualified Training Provider to Kuwait Petroleum Corporation. Gas Business

IndianOil sold 1.683 million tonnes of Natural Gas during the year with a turnover of Rs. 2,660 crore. Your Corporation participated, in a consortium with Adani Energy Ltd., in two rounds of bidding for the development of City Gas Distribution networks and was the lowest bidder in the cities of Chandigarh, Ghaziabad and Allahabad. To reach Natural Gas to consumers through cryogenic road tankers in the liquefied form, the "LNG at Doorstep" initiative is being expanded commercially.

Petrochemicals

With the commissioning of the world-scale Naphtha Cracker unit along with downstream polymer units at Panipat, your Corporation moved forward to become a major petrochemicals player in India.

During the year, the domestic and global customer base for Linear Alkyl Benzene (LAB) expanded. The total sales volume of LAB for the year was 124 TMT, which includes domestic sales of 105 TMT and export sales of 19 TMT. LAB is now being exported to 19 countries.

Purified Terephthalic Acid (PTA) sales rose to 528 TMT, exhibiting a robust growth rate of over 30% over the last year. An extensive polymer marketing set-up has been established including selection of Customer Stockists & Delivery Agents.

A Styrene Butadiene Rubber unit, the first in India, is proposed to be set up at Panipat in a joint venture with TSRC Corporation, Taiwan and Marubeni Corporation, Japan; which will add value to the intermediate streams of our Panipat Naphtha Cracker Complex.

Sustainable Development

Solar

The first commercial Solar Charging Station (SCS) was put up at a retail outlet in Orissa. Your Corporation is in the process of implementing this project on an all-India basis.

Wind

IndianOils first wind power project of 21 MW in Gujarat has completed its first year of successful power generation. The Corporation is in the process of scaling up presence in the wind energy business by expanding capacity through further investments.

Nuclear

In line with the new Vision to be the Energy of India, IndianOil has entered into an MoU with Nuclear Power Corporation of India Ltd. for exploring opportunities in the field of nuclear energy.

Bio-fuels

IndianOil CREDA Bio-fuels Limited (ICBL), a joint venture with Chattisgarh Government, has completed plantation on 770 hectares of land in the districts of Chhattisgarh. The project envisages producing 30,000 MTPA of Bio-diesel by the year 2015.

IndianOils pilot project of Jatropha plantation on 600 hectares of Government wasteland in Jhabua district of Madhya Pradesh progressed significantly, with plantation on 241 hectares completed during the year 2009.

Another bio-fuel initiative during the year was the formation of a Limited Liability Partnership (LLP) between IndianOil and Ruchi Soya Industries Limited to undertake projects in Jhansi and Lalitpur districts of Uttar Pradesh. It is a unique initiative under the Public-Private-Panchayat Partnership to set up a Bio-diesel value chain with NREGA funds for

Jatropha curcas plantation. IndianOil plans to plant over 50,000 hectares of land through this LLP.

To harness algae for commercial production of bio-diesel, an MoU has been signed with PetroAlgae LLC, USA.

Sustainability

During the year, IndianOils second GRI/G3 compliant Sustainability Report for the year 2008-09 was published. The Corporation is in the process of undertaking a major environmental mapping exercise for putting in place information systems for monitoring and management of its carbon footprint. A separate Renewable Energy & Sustainable Development group has been set up in the Corporation.

INTERNATIONAL TRADE

Your Corporation arranged to import 47.898 million tonnes of crude oil during the year amounting to Rs.1,16,767 crore to meet its requirements through a carefully selected and diversified mix of supply sources. IndianOil also exported petroleum products worth Rs.13,671 crore during 2009-10.

OPTIMISATION & INFORMATION SYSTEMS

IndianOils SAP R/3 Enterprise Resource Planning Solution offers an integrated environment for transaction processing across all business functional areas. The decision support system comprising Demand Forecasting, Supply Chain Planning & Scheduling and Refinery Fence feedback systems facilitate integration and optimisation of complex business functions across the organisation. SAP Application has now been implemented in 768 locations across the Corporation (including subsidiaries) to a common IT platform for online and concurrent business transactions.

SAFETY, HEALTH & ENVIRONMENT

Your Corporation is committed to conducting business with a strong environment conscience for sustainable development, safe workplaces and enrichment of quality of life of employees, customers and the community at large. The Vision of IndianOil also envisages Care for Environment and Community. A separate department for Safety, Health & Environment exists in IndianOil to ensure compliance with safety systems and procedures at various installations and locations of the Corporation.

An unfortunate incident of fire occurred in IndianOils Jaipur Terminal on 29lh October 2009 resulting in the loss of lives as well as destruction of property and products. An internal committee of IndianOil and a committee constituted by Ministry of Petroleum & Natural Gas has investigated the incident. The recommendations of the Committees were reviewed across the organisation and action plan prepared for implementation of each of the recommendations of the Committee. The recommendations of the committees are being implemented in a phased manner. A special audit with emphasis on safety has been carried out at all the locations of the Corporation and all safety-related issues are being closely monitored to avoid re-occurrence of such incidents. Further for implementation of various recommendations, a Monitoring Committee and a Joint Implementation Committee (JIC) has been constituted by Ministry of Petroelum & Natural Gas.

In order to strengthen the safety norms & procedures and effectively monitor compliance thereof in various units, locations and installations of the Corporation, a Committee of the Board for Safety, Health and Environment was constituted during the year.

ENERGY CONSERVATION

Your Corporation continued to maintain its thrust on oil / energy conservation at all its eight refineries and various units of pipelines division through continuous in-house process monitoring and keeping abreast with latest technological developments. As a result of various energy conservation measures undertaken, the energy index in terms of MBN* of IndianOil refineries during the year is down to 62 as against the energy index of 64 in the previous year. Similarly, energy conservation schemes implemented during the year resulted in fuel savings to the tune of about 82,000 Standard Refinery Fuel Tonne (SRFT) per annum valued at about Rs.180 crore.

HUMAN RESOURCES

Employee Profile

The Corporations employee strength as on March 31, 2010 was 34,363 including 14,210 officers. There are 2.624 women employees, constituting 7.64% of the total manpower.

Welfare of Employees

The Ministry of Petroleum & Natural Gas, in exercise of the powers conferred by Article 144(b) of the Articles of Association of IndianOil, has issued a Presidential Directive vide its letter dated 21st April 2009 to implement the pay revision of Board level and below Board level executives as per the guidelines issued by the Department of Public Enterprises (DPE) vide its Office Memorandums dated 26.11.2008, 09.02.2009 and 02.04.2009 and the same have been implemented.

Presidential Directives for weaker sections

Your Corporation has been meticulously following the Presidential Directives and other guidelines issued by the Ministry of Petroleum & Natural Gas and the DPE from time to time regarding reservation in services for Scheduled Castes, Scheduled Tribes, Physically Challenged and OBCs.

It has been the endeavour of your Corporation to utilise 25% of Community Development funds towards the Special Component Plan (SCP) and Tribal Sub Plan (TSP) for meeting the needs of the weaker sections.

In accordance with para 29 of the Presidential Directive, a note about the Corporations activities, which have direct relevance to the advancement of SC/ST category of employees along with the statistics relating to representation of SCs/STs in the prescribed proforma - SC/ST/OBC Report- I and SC/ST/OBC Report-ll, is annexed.

Status on Implementation of Disabilities Act, 1995

Your Corporation has been implementing the provision of 3% reservation for physically handicapped and disabled persons diligently.

Industrial Relations and Employees Participation in Management

The industrial relations climate in the Corporation remained harmonious, peaceful and cordial during the year. The bilateral relations with the collectives have helped in resolving several major issues. Continued information sharing and cordial relationships with the collectives helped in obtaining their cooperation for various initiatives taken by the Management to optimise manpower positioning and other productivity improvement measures including technology upgradation.

Your Corporations efforts to promote employees participation in various activities such as Suggestion Scheme, Quality Circles, Welfare, Safety, Total Productive Maintenance (TPM), etc. were continued during the year.

Human Resource Development

IndianOil culminated its journey of a new Vision in 2009, which would be the guiding light for taking IndianOil ahead in this decade. The new vision envisaged IndianOil to become The Energy of India and a Globally Admired Company. The structured matrix has six cornerstones: Ethics, People, Innovation, Environment, Technology and Customers.

IndianOil Institute of Petroleum Management (NPM), the apex training institute of the Corporation, continued to be the torch-bearer of the learning and development initiatives of IndianOil.

Sports

IndianOils sportspersons continued to excel in national and international sporting events in various disciplines during the year. The Sports Scholarship Scheme for promising young sportspersons was continued with a view to encourage talent and create a pool of sportspersons.

Shri P. Gopichand, the renowned badminton star, won the Dronacharya Award from the Government of India. Ms. Trupti Murgunde won the Czech Open Badminton championship. Shri S.S. Ganguly won the Asian

Continental Chess Championship at Olangapo, Philipppines. Shri Prabhjot Singh and Shri Rajpal Singh represented India in International Hockey Tournaments. Shri A. Sharath Kamal represented India in the Commonwealth Table Tennis Championship at Glasgow, Scotland.

Corporate Social Responsibility (CSR)

IndianOils present business practices and vision for the future are synergised with sustainability. Our strong commitment and sense of corporate social responsibility is reflected in the decision of the IndianOil Board to enhance the annual CSR expenditure to 2% of the retained profits of the year 2009-10. During the year, a Committee of the Board was constituted to monitor and administer CSR activities in IndianOil.

IndianOil continued its endeavour to make a positive impact to the underprivileged communities in and around our major installations by supporting a wide range of socio-economic initiatives such as clean drinking water, health & medical care and education with special emphasis towards the weaker sections of the society.

IndianOil continued its support to Global Compact in implementing the ten guiding principles in United Nations agenda on human rights, labour standards, environment and anti-corruption. As an active founder member and now permanent member, IndianOil also actively participated in the meetings and conferences of the Global Compact Society.

During the year, 450 meritorious students from economically weaker sections of the society and pursuing 10+/ITI and professional courses in engineering, medicine, business administration and management disciplines were awarded scholarships.

Hindi Implementation

Efforts continued during the year to enhance the progressive use of Hindi in official work in compliance with the Official Language Act, 1963, Official Language Rules, 1976 and orders issued by the Government of India from time to time. The Official Language Implementation Committees functioning at IndianOil units regularly review the progress of implementation of official language policies and the annual programme as circulated by the Department of Official Language, Ministry of Home Affairs. Committee of Parliament on Official Language inspected five locations during the year. A team of officials from Ministry of Petroleum and Natural Gas inspected five IndianOil locations to review progress in use of Hindi. Foreign Tours

IndianOil officers undertook a total of 809 foreign tours during 2009-10 for business purposes and for attending conferences, seminars and training programmes. The total expenditure on foreign tours was Rs.16.15 crore.

Vigilance

The objective of vigilance as an organisational function is to ensure maintenance of the highest level of integrity throughout the organisation. To achieve this, the Vigilance group carries out mainly preventive and punitive functions with emphasis on preventive aspect. Towards fulfilment of this objective, 68 vigilance awareness programmes were conducted during the year 2009-10. Vigilance Awareness Week was observed across various locations of the Corporation. A large number of joint surprise inspections of dealers / distributors network was also carried out during the year.

REMUNERATION TO THE AUDITORS

The Auditors remuneration for the year 2009-10 has been fixed at Rs.75.50 lakhs plus applicable service tax. In addition to this, reasonable out-of-pocket expenses actually incurred are also reimbursable.

ENTERTAINMENT EXPENSES

The entertainment expenses for the year 2009-10 were Rs.2.23 crore.

SUBSIDIARIES

The financial performance of following subsidiaries of the Corporation during 2009-10 is as under:

( Rs. in Crore)

Subsidiary Total Net Dividend Turnover Period

Chennai Petroleum Corporation Ltd. 29,184 603 120% IndianOil (Mauritius) Ltd. 744 19 -

Lanka IOC Pic. 2,095 (18) -

IOC Middle East FZE 48 1 -

IndianOil Technologies Limited, the wholly owned subsidiary of IndianOil, is in the process of liquidation effective 12,h January 2010.

REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

In accordance with the Companys (Disclosure of Particulars in the report of Board of Directors) Rule, 1988, a report on Energy Conservation, Technology Absorption and Foreign Exchange earnings is annexed.

PARTICULARS OF EMPLOYEES

The particulars of employees pursuant to Section 217(2A) of the Companies Act, 1956 and Rules framed there under are annexed.

BOARD OF DIRECTORS

Shri P.K. Chakraborti, Director (Pipelines), ceased to be a Director upon superannuation from the services of the Corporation on 31.08.2009 and Shri K.K. Jha was appointed as Director (Pipelines) with effect from 01.09.2009. Shri S. Sundareshan ceased to be a Director with effect from 01.02.2010 upon his elevation as Secretary, MoP&NG. Shri S. Behuria ceased to be Chairman upon completion of his tenure on 28.02.2010 and Shri B.M. Bansal, Director (P&BD) holds the additional charge of the post of Chairman, effective 01.03.2010. Shri S. Bhargava, Additional Secretary, MoP&NG was appointed as a Director with effect from 23.03.2010. Shri Anand Kumar, Director (R&D) ceased to be a Director upon superannuation from the services of the Corporation with effect from 01.07.2010.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under the new Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31sl March 2010, all applicable accounting standards had been followed along with proper explanations relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the Directors had 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) that the Directors had prepared the accounts for the financial year ended 31st March 2010 on a going concern basis.

ACKNOWLEDGEMENTS

The Board of Directors hereby records its deep appreciation of the valuable services and dedicated efforts of the members of the IndianOil family in the Corporations achievements during the year 2009-10. The Board also wishes to thank the Government of India, particularly the Ministry of Petroleum & Natural Gas, and the various State Governments, regulatory and statutory authorities for their valuable guidance and support. The Board is also grateful to the Corporations bankers, investors, customers, consultants, technology licensors, contractors and vendors for their continued support and confidence reposed in the Corporation.

The Board of Directors wishes to place on record its deep appreciation for the commendable performance and immense contribution made by Shri S. Behuria during his chairmanship, which enabled IndianOil to achieve greater heights. The Board also wishes to place on record its appreciation for the significant contribution and guidance rendered by Shri P.K. Chakraborti, Shri S. Sundareshan and Shri Anand Kumar during their tenure on the Board.

For and on behalf of the Board

New Delhi (B.M.BANSAL)

Dated :7th July, 2010 CHAIRMAN

 
Subscribe now to get personal finance updates in your inbox!