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Indian Oil Corporation Ltd.

BSE: 530965 Sector: Oil & Gas
NSE: IOC ISIN Code: INE242A01010
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NSE 15:51 | 11 Dec 404.40 -0.45
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OPEN 410.00
PREVIOUS CLOSE 404.60
VOLUME 163830
52-Week high 462.60
52-Week low 294.15
P/E 12.28
Mkt Cap.(Rs cr) 196,033
Buy Price 403.70
Buy Qty 7.00
Sell Price 404.90
Sell Qty 40.00
OPEN 410.00
CLOSE 404.60
VOLUME 163830
52-Week high 462.60
52-Week low 294.15
P/E 12.28
Mkt Cap.(Rs cr) 196,033
Buy Price 403.70
Buy Qty 7.00
Sell Price 404.90
Sell Qty 40.00

Indian Oil Corporation Ltd. (IOC) - Auditors Report

Company auditors report

To

TheMembersofIndianOilCorporation

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone financial statements ofIndian Oil Corporation Limited ("the Company") which comprise the Balance Sheetas at 31st March 2017 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation in which are incorporated the returns for the year ended on that date auditedby the branch auditors of the company's four branches at locations of the branches.

Management's Responsibility for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in Section 134 (5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone Ind-AS financial statements that give atrueandfairview position)profit or thestate affairs(financial loss (financialperformance including other comprehensive income)cash flows and changes in the equity ofthe Company in accordance with the accounting principles generally acceptedinIndiaincludingtheIndianAccountingStandards(IndAS)specifiedunder Section 133 of theAct.This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andforpreventing selectionand application of appropriate accounting policies;detectingfrauds otherirregularities; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based on our audit.

We have taken into account the provisions of the Act the accountingandauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder.

We conducted our audit of standalone Ind ASfinancialstatementsinaccordancewiththeStandardsonAuditingspecifiedunder Section 143(10) ofthe Act. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the standalone Ind ASfinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone Ind-AS financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind ASfinancialstatements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overallpresentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position)of the Company as at 31 st March 2017 and itsprofit (financial performance including other comprehensive income) and its cash flows andthe changes in equity for the year ended on that date.

Other a) The comparative financial information ofthecompanyfortheyearended 31 st March'2016 and the transition date opening balancesheet as at 1st April'2015 included in these standalone Ind-AS financial statementsare based on previously issued prepared in accordance with Companies (AccountingStandards) Rules 2016 audited by us for the year ended 31 st March 2016 our report dated27th May 2016 and audited by one of us and two predecessor auditors for the year ended31st March 2015 whose report dated 29th May 2015 expressed an unmodified opinion on thosestandalone financial statements as adjusted for the differences in accounting principlesadopted by the company on transition to the Ind AS which have been audited by us.

We did not audit the financial statements/information

Company whose financial statements / financial ` 38440.12 crore as at31 informationreflecttotalassetsof st March 2017 and revenues of ` 241849.10 crore forthe year ended on that date as considered in the standalone financial statements. Thefinancial statements/ information of these branches have been audited by the branchauditors whose reports have been furnished to us and our opinion in so far as it relatesto the amounts and disclosures included in respect of these branches is based solely onthe report of such branch auditors. b) The standalone Ind AS financial statements includethe Company's proportionate share (relating to Jointly controlled operations) inassets ` 430.29 crore liabilities` 132.40 crore income of ` 0.37 crore and expenditure `90.62 crore and elements making of the cash flow statement and related disclosurescontained in the enclosed financial statements and our observations thereon are based onunaudited statements from the operators to the extent available with the Company inrespect of 17 blocks in India and overseas and have been certified We have also placedreliance on technical / commercial evaluation by the management in respect ofcategorization of wells as exploratory development and dry well allocation of costincurred on them liability under new exploration licensing policy (NELP) and nominatedblocks for under-performance against agreed Minimum Work Programme.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Government of India in terms of sub-section (11) ofsection 143 of the Act and on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanationsgiven to us we give in the Annexure 1 a statement on the matters specified in theparagraphs 3 and 4 of the said Order.

2. We are enclosing our report in terms of Section 143 (5) of the Acton the basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us in the Annexure2 on the directions issued by the Comptroller and Auditor General of India.

3. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books andproper returns adequate for the purpose of our audit have been received from the branchesnot visited by us. (c) The reports on the accounts of the branch officesof the Companyaudited undersection143(8) of the Act by branch auditors have been sent to us and havebeen properly dealt with by us in preparing this report (d) The Balance Sheet theStatement of Profitand Loss (including Other Comprehensive Income) the Cash FlowStatement and Statement of Changes in Equity dealt with by this Report are in agreementwith the books of account.

(e) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Indian Accounting Standards Section 133 of the Act.

(f) We are informed that the provisions of Section 164(2) of the Act inrespect of disqualification of directors are not applicable to the Company being aGovernment Company in terms of notification no. G.S.R.463(E) dated 5th June 2015 issued byMinistry of Corporate Affairs.

(g) With respect to the adequacy of the internal financial controlsover financial reporting of the company and the operating effectiveness of such controlsrefer to our separate report in Annexure 3.

(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements
- Refer Note 36 (B1) to the financial statements;
ii. The Company has made provision as required under the applicable law or Indian accounting standards for material foreseeable losses if any on long-term contracts including derivative contracts.
iii. There has been no delay in transferring the amount required to be transferred to Investor Education and Protection company in accordance with the relevant provisions of the Companies Act and Rules made there under by the Company.
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in Notification SO 3407(E) dated 8th November 2016 of the Ministry of Finance during the period from 8th November 2016 to 30th December 2016; and such disclosures are in accordance with the books of account maintained by the Company- Refer Note 50 (4) of the standalone Ind AS financial statements.

For J GUPTA & CO. For S.K. MEHTA & CO. For V SANKAR AIYAR &CO. For CK PRUSTY & ASSOCIATES Chartered Accountants Chartered Accountants CharteredAccountants Chartered Accountants (Firm Regn. No. 314010E) (Firm Regn. No. 000478N) (FirmRegn. No. 109208W) (Firm Regn. No. 323220E)

Sd/- Sd/- Sd/- Sd/- (CA. NANCY MURARKA) (CA. ROHIT MEHTA) (CA. M.S.BALACHANDRAN) (CA. GV. JAYABAL) Partner Partner Partner Partner M. No. 067953 M. No.091382 M. No. 024282 M. No. 015616

Place of Signature : New Delhi Dated : 25th May 2017

ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT

Annexure referred to in Independent Auditors' Report of even dateto the members of Indian Oil Corporation Limited on the accounts for the year ended 31stMarch 2017

(i) (a) The Company has generally maintained proper records showingfull particularsincludingquantitativedetailsandsituation fixed assets. of (b) There is aregular programme of physical verification of all fixed assets other than LPG cylindersand pressure regulators with customers over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. In our opinion and as per the information given by the Management thediscrepancies observed were not material and have been appropriately accounted in thebooks.

(c) The title/ lease deeds of the immovable properties are held in thename of the Company except cases of Leasehold Land of 2031353 square meters having costof ` 119.28 crore and Freehold land of 1208962 square meters having cost of ` 116.40crore and buildings having cost of ` 5.64 crore of which title/ lease deeds are pendingfor execution in the name of the Company.

(ii) The inventory has been physically verified by the management atreasonable intervals and no material discrepancies were noticed on physical verification.(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured during the year to any companies firms limitedliability partnerships or other parties covered in register maintained under Section 189of the Companies Act 2013.

In view of above the clauses 3 (iii)(a) 3 (iii)(b) and 3 (iii)(c) ofthe Order are not applicable.

(iv) According to the information and explanations given to us theCompany being a Government Company is exempted from the provisions of section 186 as itis engaged in the business of providing infrastructure facilities as provided underSchedule-VI of the Companies Act'2013. According to the information and explanationsgiven to us there were no transactions during the year to which the provisions of section185 were applicable.

(v) In our opinion and according to the information and explanationsgiven to us during the year the company has not accepted public deposits and no depositsare outstanding at the year end except old cases under dispute aggregating to`0.01 crorewhere we are informed that the company has complied with necessary directions.

(vi) We have broadly reviewed the accounts and records maintained bythe Company pursuant to the Rules made by the Central Government (1) of Section148forthemaintenanceofcostrecordsundersub-section of the Companies Act 2013 read withCompanies (Cost Records & Audit) Rules 2014 and we are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made detailed examination of the records with a view to determine whether theyare accurate and complete.

(vii) (a) Undisputed statutory dues including provident fundemployees' state insurance income tax sales-tax value added tax service tax dutyof custom duty of excise cess and other statutory dues havegenerallybeenregularlydepositedwiththeappropriateauthoritiesand there are no undisputeddues outstanding as on 31st March 2017 for a period of more than six months from the datethey became payable. (b) The disputed statutory dues that have not been depositedonaccountofmatterspendingbeforeappropriateauthoritiesare annexed in Appendix A withthis report.

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of dues to financial institutionsbanks and Government or debenture holders.

(ix) According to the information and explanations given to us theCompany has applied the obtained. During the year the Company has not raised any amountthrough initial public offer or further public (x) According to the information andexplanations given to us and as represented by the Management and based on our examinationof the books and records of the Company and in accordance with generally accepted auditingpractices in India we have been informed that no material case of frauds by the Companyor on the company by its officers or employees has been noticed or reported during theyear. However the Management has informed us of an alleged fraudulent act by an employeeof the Company involving an amount of ` 0.89 crore in the dispatches of productswithout generation of invoices and deviation from established procedures. We are furtherthe officials involved.informedthatpunitiveactions (xi) As informed the provisions ofSection 197 relatingto managerial remuneration are not applicable to the Company being aGovernment Company in terms of MCA Notification no. G.S.R. 463 (E) dated5 th June 2015.

(xii) The Company is not a Nidhi Company and hence the requirement ofClause 3 (xii) of the order is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us all transactionsduring the year with the related approved by the AuditCommittee and are in compliance with sections 177 of the Companies Act 2013 whereapplicable and since the said transactions were in the ordinary course of business of thecompany and were at arm's length basis the provisions of section 188 are notapplicable and the details have been disclosed in the Standalone Ind AS FinancialStatements as required by the applicable Indian accounting standards; us the Company hasnot made any preferential allotment or private placement of (xiv)Accordingtotheinformationandexplanations shares or fully or partly convertible debenturesduring the year under review.

(xv) In our opinion and accordingtotheinformationand explanationsgivento us the Company has not entered into any non-cash transactions with directors orpersons connected with him.

(xvi) According to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For J GUPTA & CO. For S.K. MEHTA & CO. For V SANKAR AIYAR & CO. For CK PRUSTY & ASSOCIATES
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
(Firm Regn. No. 314010E) (Firm Regn. No. 000478N) (Firm Regn. No. 109208W) (Firm Regn. No. 323220E)
Sd/- Sd/- Sd/- Sd/-
(CA. NANCY MURARKA) (CA. ROHIT MEHTA) (CA. M.S. BALACHANDRAN) (CA. GV. JAYABAL)
Partner Partner Partner Partner
M. No. 067953 M. No. 091382 M. No. 024282 M. No. 015616

Place of Signature : New Delhi Dated : 25th May 2017

REPORTING AS PER COMPANIES (AUDITORS' REPORT) ORDER 2016 (DISPUTEDSTATUTORY DUES)

Name of the Statute / Nature of Dues Forum Where Dispute is pending Gross Amount (` Crore) Amount Paid under Protest (` Crore) Amount (net of deposits) (` Crore) Period to which the Amount relates (Financial Years)
1 CENTRAL EXCISE ACT 1944
CENTRAL EXCISE Supreme Court 26.49 - 26.49 2006 to 2016
High Court 27.97 0.38 27.59 2002 to 2016
Tribunal 2040.62 23.81 2016.81 1991 to 2017
Revisionary Authority 7.13 0.04 7.09 2000 to 2016
Appellate Authority 14.01 0.85 13.16 2005 to 2017
(Below Tribunal)
Total 2116.22 25.08 2091.14
2 CUSTOMS ACT 1962
CUSTOMS DUTY Supreme Court 8.98 2.00 6.98 1998 to 2016
High Court 0.21 - 0.21 2004 to 2005
Tribunal 66.58 3.07 63.51 1998 to 2016
Revisionary Authority 0.13 0.01 0.12 2014 to 2015
Appellate Authority 57.70 - 57.70 2012 to 2016
(Below Tribunal)
Total 133.60 5.08 128.52
3 SALES TAX/ VAT LEGISLATIONS
SALES TAX/ VAT/ TURNOVER TAX Supreme Court 12.98 5.38 7.60 1999 to 2015
High Court* 3570.93 116.27 3454.66 1982 to 2016
Tribunal 1656.17 101.17 1555.00 1988 to 2017
Revisionary Authority 797.51 85.28 712.23 1990 to 2015
Appellate Authority 3893.00 914.21 2978.79 1992 to 2017
(Below Tribunal)
Total 9930.59 1222.31 8708.28
4 INCOME TAX ACT 1961
INCOME TAX High Court 426.40 426.40 - 1986 to 2004
Tribunal 1836.54 1582.89 253.65 2001 to 2012
Appellate Authority 4151.66 701.07 3450.59 2007 to 2015
(Below Tribunal)
Total 6414.60 2710.36 3704.24
5 FINANCE ACT 1994
SERVICE TAX Tribunal 35.12 0.67 34.45 2003 to 2017
Appellate Authority 8.99 0.08 8.91 2007 to 2017
(Below Tribunal)
Total 44.11 0.75 43.36
6 STATE LEGISLATIONS
ENTRY TAX Supreme Court 28027.85 15637.23 12390.62 1991 to 2017
High Court 3716.92 1149.19 2567.73 2003 to 2017
Tribunal 102.53 36.92 65.61 1998 to 2016
Revisionary Authority 9.50 1.22 8.28 1999 to 2013
Appellate Authority 8.66 1.88 6.78 2007 to 2016
(Below Tribunal)
Total 31865.46 16826.44 15039.03
7 OTHER CENTRAL / STATE
LEGISLATIONS
OTHERS COMMERCIAL TAX etc. Supreme Court 9.10 - 9.10 2004 to 2011
High Court 69.11 10.00 59.11 2001 to 2009
Tribunal 1.85 1.85 - 2010 to 2011
Appellate Authority 10.17 1.17 9.00 1999 to 2016
(Below Tribunal)
Total 90.23 13.02 77.21
GRAND TOTAL 50594.81 20803.03 29791.78

* Includes ` 2216.70 crore which has not been deposited on account ofdispute with regard to the deferment of liability. (Refer Point No. 7 of Note-50 of theStandalone Ind-As Financial Statements) NOTE: Dues include penalty and interest whereverapplicable.

ANNEXURE 3 TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE TO THEMEMBERS OF INDIAN OIL CORPORATION LIMITED ON THE STANDALONE IND AS FINANCIAL STATEMENTSFOR THE YEAR ENDED 31st MARCH 2017

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Indian Oil Corporation Limited ("theCompany") as of 31 st March2017 in conjunction with our audit of the standalone Ind AS financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by theCompanyconsideringtheessentialcomponents of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementationfinancial controls that were operatingeffectively for ensuring the orderly and andmaintenanceofadequateinternal efficientconduct of its business including adherence to company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internalfinancialcontrolsoverfinancialreporting assessing the risk thata material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.

Meaning of Internal Financial Controls over Financial Reporting regardingthe reliability of Acompany'sinternalfinancialcontroloverfinancialreporting financialreporting and the preparationofstandaloneIndASfinancialstatements for external purposes inaccordance with generally accepted accountingprinciplesincludingtheIndAS.Acompany'sinternalfinancialcontroloverfinancialreportingincludes those policies and procedures that (1) pertain to the maintenance of recordsthat in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of standalone Ind ASfinancial statements in accordance with generally accepted accounting principles includingthe Ind AS and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timelydetection dispositionof thecompany's assets that could have a unauthorisedacquisition useor material effect onthe standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting financialreporting including the possibility of collusion or improperBecauseoftheinherentlimitationsofinternal controlsover management override of controlsmaterial misstatements due to error or fraud may occurandnotbedetected.Alsoprojectionsofany controls over financial reporting to future periods are subject to the risk that theinternal financial control over evaluationoftheinternalfinancial financial reporting maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial financialreporting and such internal controlssystemover reporting wereoperating effectively as at March 31 2017 based on the internal control over financialreporting financialcontrolsoverfinancial criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Other Matters

Our aforesaid report under section 143(3)(i) of the Act on the adequacyand operating effectiveness of the internal financial controls over financial reporting inso far as it relates to four branches audited by the branch auditors is based on thecorresponding reports of the branch auditors.

For J GUPTA & CO. For S.K. MEHTA & CO. For V SANKAR AIYAR & CO. For CK PRUSTY & ASSOCIATES
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
(Firm Regn. No. 314010E) (Firm Regn. No. 000478N) (Firm Regn. No. 109208W) (Firm Regn. No. 323220E)
Sd/- Sd/- Sd/- Sd/-
(CA. NANCY MURARKA) (CA. ROHIT MEHTA) (CA. M.S. BALACHANDRAN) (CA. GV. JAYABAL)
Partner Partner Partner Partner
M. No. 067953 M. No. 091382 M. No. 024282 M. No. 015616

Place of Signature : New Delhi Dated : 25th May 2017