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Indian Oil Corporation Ltd.

BSE: 530965 Sector: Oil & Gas
NSE: IOC ISIN Code: INE242A01010
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VOLUME 298858
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P/E 12.02
Mkt Cap.(Rs cr) 191,832
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OPEN 395.35
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VOLUME 298858
52-Week high 462.60
52-Week low 281.70
P/E 12.02
Mkt Cap.(Rs cr) 191,832
Buy Price 0.00
Buy Qty 0.00
Sell Price 395.00
Sell Qty 41522.00

Indian Oil Corporation Ltd. (IOC) - Director Report

Company director report

Dear Members

On behalf of the Board of Directors it is my privilege to present the58th Annual Report of the Corporation 31st March 2017 alongwith the Audited FinancialStatements and Auditors' Report on the financial statements.

The year 2016-17 was another landmark year as the Corporation not onlyimproved upon 2015-16 but achieved the highest ever levels of performance in almost allthe physical parameters with record profits.

PERFORMANCE REVIEW FINANCIAL

2016-17 2015-16
US$ Million ` in Crore US$ Million ` in Crore
Turnover 65391 438710 60969 399105
(Inclusive of Excise Duty & Sale of Services)
EBITDA 5364 35989 3570 23371
(Profit Before Exceptional Items Finance Cost Tax
Depreciation & Amortisation)
Finance Cost 514 3445 472 3090
Depreciation 927 6223 736 4819
Profit Before Tax & Exceptional Items 3923 26321 2362 15462
Exceptional Items 0 0 208 1364
Profit Before Tax 3923 26321 2570 16826
Tax Provision 1075 7215 853 5584
Profit After Tax 2848 19106 1717 11242
Balance Brought Forward from Last Year - -
Less: Appropriations
Interim Dividend paid 1272 8531 199 1303
Final Dividend 300 2014 239 1564
Corporate Dividend Tax 324 2177 90 586
Insurance Reserve (Net) 3 20 3 20
Bond Redemption Reserve 69 466 110 717
CSR Reserve (Net) 0 (1) (2) (15)
General Reserve 880 5899 1078 7067
Balance Carried to Next Year - - - -

SHARE VALUE

2016-17 2015-16*
US$ US$
Cash Earnings Per Share 0.80 53.44 0.52 33.89
Earnings Per Share 0.60 40.31 0.36 23.72
Book Value Per Share 3.24 210.43 2.81 185.96

*Adjusted for Bonus Shares 1:1 issued in October 2016

Note: Exchange Rate used:-

For 2016-17: Average Rate 1 US$ = ` 67.09 and Closing Rate 1 US$ = `64.86 as on 31.03.2017 For 2015-16: Average Rate 1 US$ = ` 65.46 and Closing Rate 1 US$ =` 66.26 as on 31.03.2016

PHYSICAL

Million Tonnes

Particulars 2016-17 2015-16
Refineries Throughput 65.19 56.69
Pipelines Throughput 82.49 79.82
Product Sales (inclusive of Gas Petrochemicals 83.49 80.66
& Exports)

CHANGES IN SHARE CAPITAL AND DISINVESTMENT BY THE GOVT.

OF INDIA

During the year your Corporation issued bonus shares in the ratio of1:1 i.e. one bonus share in the ratio of one share held in October 2016. Consequentlythe paid-up capital increased from ` 2427.95 crore to ` 4855.90 crore.

The Government of India disinvested 33276129 equity shares inJanuary 2017 and 12464272 equity shares in March 2017 in IndianOil in favour of CPSEETF (an exchange traded fund comprising PSU stocks). Consequently the holding of thePresident of India in the equity share capital of IndianOil was reduced to 57.34 per cent.

DIVIDEND

The Board of Directors of your Corporation has recommended a finaldividend of 10 per cent i.e. ` 1/- per equity share of ` 10/- each on the paid-up ShareCapital in addition to two interim dividends of ` 13.50 per share and ` 4.50 per sharepaid in February and March year 2017 2016-17 is 190 per cent i.e. ` 19 per equity share(after issue of Bonus shares in the ratio of 1:1) against 140 per cent i.e.` 14 perequity share declared in the previous year. This is the 50th consecutive year for whichyour Corporation has recommended payment of dividend. So far your Corporation has paid acumulative dividend of ` 39455 crore excluding the final dividend of` 485.59 crorepayable for the dividend current year subject to approval by members. The final shall bepaid to the members whose names appear in the Register of Members as well as theBeneficial Ownership Position provided by NSDL/CDSL as at the close of 21st August 2017.

CONTRIBUTION TO EXCHEQUER

Your Corporation has consistently been the largest contributor to thenational exchequer in the form of duties and taxes. During the year 2016-17 ` 179014crore was paid to the exchequer as against ` 132064 crore paid in the previous year. Anamount of ` 102817 crore was paid to the Central Exchequer and ` 76197 crore to theState Exchequer as against ` 67459 crore and ` 64605 crore paid in all in the previousyear to the Central and State Exchequer respectively.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Companies Act 2013 and theAccounting Standards issued by the Institute of Chartered Accountants of India yourCorporation has prepared the Consolidated Financial Statement for the group includingitssubsidiariesandjoint y the Government. venture entities. The highlights of theConsolidated Financial Results are as follows:

Particulars

2016-17

2015-16

(US$ (` in (US$ (` in
Million) Crore) Million) Crore)
Turnover 66634 447047 62189 407089
(Inclusive of Excise Duty
& Sale of Services)
Profit Before Tax 4167 27956 2761 18072
Profit After Tax 3038 20385 1896 12413
Less: Share of Minority 80 536 60 391
Profit for the Group 2958 19849 1836 12022

Note: Exchange Rate used:-For 2016-17: Average Rate 1 US$ = ` 67.09 For2015-16: Average Rate 1 US$ = ` 65.46

MoU PERFORMANCE

The Memorandum of Understanding (MoU) of your Corporation with theGovernment of India setting the performance parameters and targets for the year 2016-17was signed by Chairman IndianOil and Secretary (P&NG) Govt. of India on 5th July2016. The MoU for 2016-17 while giving utmost thrust on CAPEX and Project Monitoringincluded challenging targets at the highest level for enhanced of operations excellenceefficiency and across the organisation. Also the concept of "Additional EligibilityCriteria" for excellent rating has been introduced from 2016-17. With sustained anddedicated efforts the Corporation has been able to meet the MoU targets under variousparameters as per the MoU with the Government. The Corporation has consistently maintained"Excellent" MoU performance over the years. The performanceratingforMoU2016-17isyettobefinalised

INTERNATIONAL TRADE

YourCorporation 55.71 million tonnes of crude oil during the year asagainst 49 million tonnes in the previous year to meet its crude oil requirements througha carefully selected and diversified mix of supply sources. The import of petroleumproducts during the year was 7.21 million tonnes as against 5.96 million tonnes in theprevious year. The Corporation also exported petroleum and petrochemical products duringthe year.

OPERATIONAL PERFORMANCE Refineries achieved the highest ever crudethroughput IndianOil refineries of 65.19 million tonnes during the year 2016-17 as againsta 56.69 million tonnes in 2015-16. The capacity utilisation (excluding Paradip Refinery)was 105.1 per cent as against 103.7 during 2015-16. The refineries (excluding ParadipRefinery) also achieved the best performance in energy parameters of Fuel & LossSpecific Energy Consumption (MBN) and Energy Intensity Index (EII) at 8.49 per cent 74.9and 101.5 respectively as during 2015-16. The Paradip Refinery which was commissionedand began operations in March 2016 in a phased manner has fully stabilised and achievedan overall capacity utilisation of 54.9% in 2016-17 touching a peak of 96.4% in March2017. It has achieved 100% capacity utilisation in May 2017.

All the refineries of the Corporation have commenced supplies of BS-IVgrade auto-fuels w.e.f. 1st April 2017. During the year three for the first timenewcrude oilvarieties refineries which have been added to the crude oil basket with anobjective to widen the crude oil sources for de-risking the crude oil procurement process.

Pipelines

IndianOil Pipelines achieved the highest ever throughput of 82.49million tonnes during the financial year 2016-17 as against a throughput of 79.82 milliontonnes in 2015-16. The crude oil pipelines recorded the highest ever annual throughput of51.34 million tonnes which is 1.6 per cent higher than the previous year'sthroughput of 50.54 million tonnes. The petroleum product pipelines also recorded thehighest ever throughput of 31.15 million tonnes as against 29.28 million tonnes achievedlast year registering a growth of 6.4%. The gas pipelines achieved the highest everthroughput of 1587 MMSCM during the year as against a throughput of 1380 MMSCM in2015-16. With the commissioning of 1102 km of new pipelinesectionsduring the year thetotal length of the pipeline network of crude oil product and gas pipelines as on 31stMarch 2017 expanded to 12848 km.

Marketing

Your Corporation dominated the domestic market with a market share of42.9% and sold 74.11 million tonnes of petroleum products during the year as against72.60 million tonnes during the previous year. In addition 4.72 million tonnes ofpetroleum products were exported during the current year as against 3.46 million tonnesexported during the previous year. Your Corporation took several exceptional initiativesduring the year in ensuring the supply of petroleum products in exceptional situationswhich include supply to Tripura via Bangladesh airlifting fuel supply to curfew-struckManipur supplies in Kashmir valley and cyclone-hit Chennai etc. During the year yourCorporation commissioned 881 retail outlets (fuel stations including 365Kisan SevaKendra outlets in rural areas) taking their total number to 26212. In addition CNGfacilities were commissioned at 90 retail outlets during the year. The Kisan SevaKendra (KSK) outlets of the Corporation increased their contribution to the totalsales of the Corporation with Petrol (Retail) touching a new high of 14.7% and Diesel(Retail) touching 14.6%. Your Corporation continued with its focus on the use ofalternative and 2441 retail outlets were converted to operate on solar energy during theyear taking their number to 6607. Health & eye check-up of over 75000 truck driverswas carried out at the retail outlets and transport hubs during the year.

IndianOil released the highest ever new domestic LPG connections to1.53 crore customers raising the Indane customer strength to 11.44crore.Outof1.53crore new connections were released under Pradhan Mantri Ujjwala Yojana(PMUY) the flagship scheme of the Government of India to the women of poor householdswith an objective to improve the health of poor families by providing clean cooking fuel.Additional bottlingcapacities TMTPA and tankages of 7200 MT capacity were added duringthe year to meet the increased demand.

IndianOil's flagship SERVO maintained its market leadershipposition during the year and finished lube sales registered a growth of 2.3 per cent overthe previous year. 17 new lube grades were introduced during 2016-17 and 26 productapprovals were obtained from Original Equipment Manufacturers (OEMs). IndianOil'sAviationService continued to maintain its leadership position during the year with amarket share of 59.3 per cent. During the year your Corporation commissioned its aviationfuel stations at Barrackpore Sunabebda Shimla and Bhuj.

Explosives & Cryogenics

During the year the Explosives and Cryogenics businesses of yourCorporation continued with their excellent performance and recorded the highest everproduction and sales of explosives and cryocans. The Explosives group manufactured andsold 157661 metric tonnes of explosives during the year recording a growth of 9.77 percent over the previous year's volume of 143626 metric tonnes. The Cryogenics groupsold 27667 units of cryocans during 2016-17 as against previous year's sale of27538 units.

RESEARCH & DEVELOPMENT

During the year the INDAdeptG technology developed by IndianOil'sR&D Centre was commissioned at Guwahati Refinery for reducing sulphur content ofcracked gasoline streams to be able to meet Euro-IV & VI sulphur specification withminimum RON loss.

Ind-CokerAT another technology developed in-house was successfullywith significant improvement in the demonstratedatPanipat distillate yield. In additiondelayed coking technology jointly licenced by IndianOil and EIL was successfullyimplemented for revamp of the 0.6 MMTPA Coker-A unit at Barauni Refinery.

During the year Oilivorous-S technology developed by the R&DCentre of your Corporation was successfully used for containing the oil spill at Chennai.

105 Patents were filed during the year 2016-17 out of which 6 areIndian and 99 are foreign patents. 27 patents were granted during the year 2016-17(India-6 USA-7 Canada-1 France-1 Germany-2 Great Britain-1 Italy-1 Japan-5Russia-1 Saudi Arabia-2).

During the year the Corporation acquired additionalland at Faridabadin Haryana for setting up R&D Campus-II for carrying out research in

PROJECTS

IndianOil continues to lay emphasis on infrastructure development andhas been consistently investing in several projects across the country. The dedicatedproject teams of IndianOil ensure that implementation of the projects from the idea stageto commissioning is done seamlessly. The projects are financedthrough an optimum mix ofinternal accruals and borrowings from domestic as well as internationalmarkets. Thedetails of the projects completed ongoing and future are as under:-

Completed Projects

Reverse osmosis plant at Gujarat Refinery

Revamp of Coker-A Unit at Barauni Refinery Refiner y IndaDeptGUnitatGuwahati

Augmentation of Paradip-Haldia-Barauni Pipeline

351-km of pipeline sections as part of Salaya-Mathura Pipelinedebottlenecking

Jatni-Raipur section of Paradip-Raipur-along with branch pipelines toJharsuguda & Korba involving 751 km pipeline section

Product storage depots at Imphal Jharsuguda and Korba

Replacement of mainline pumping units in Salaya-Mathura Pipeline

Ongoing Projects

Refiner DistillateyieldimprovementprojectatHaldia

Petcoke evacuation project at Paradip

Propylene Unit at Paradip Refinery

BS-VIprojectsatall

Installation of INDMAX Unit alongwith associated facilities atBongaigaon Refinery

Jharsuguda-Khuntisectionof Paradip-Raipur-Ranchi product pipeline

Paradip-Haldia-Durgapur LPG pipeline

Paradip-Hyderabad pipeline

Augmentation of Paradip-Haldia-Durgapur LPG pipeline and its extensionup to Patna and Muzaffarpur

Jaipur-Panipat naphtha pipeline along with augmentation ofKoyali-Sanganer pipeline

CBR-Trichy pipeline

Ennore-Trichy-Madurai LPG pipeline

Ennore-Nagapattinam-gas pipeline

18" Haldia-Barauni pipeline

Branch pipeline on Barauni-Kanpur pipeline to Baitalpur and Motihari

Motihari-Amlekhgunj pipeline

Koyali-Ahmednagar-Solapur pipeline

Augmentation of Chennai-Trichy-Madurai pipeline

LPG import terminal at Paradip and Kochi

Augmentation of LPG terminal at Kandla

LPG bottling plants at Banka Gorakhpur Bathinda Goindwal SahibAgartala Jabalpur Nagpur Salem Gwalior Sitarganj Trishundi Korba and Khurda

LPG terminal at Paradip

Product storage depots at Khunti (Jharkhand) Una Guntakal (A.P.) andAsanur (T.N.)

5-MMTPA LNG import terminal project at Ennore (through a Joint VentureCompany)

Future Projects

Barauni Refinery expansion project

-Ranchi pipeline project Expansion of Naphtha Cracker Unit and revampof MEG Unit at Panipat

Expansion of PX/PTA Plant at Panipat Refinery

Installation of Indjet Unit at Barauni Refinery

Guwahati-Silchar-Imphal product pipeline

Dahej-Koyali natural gas pipeline

Augmentation of Paradip-Haldia-Barauni pipeline

60 MMTPA West Coast Refinery in Maharashtra through a Joint VentureCompany.

the areas of alternative renewable energy nano-technology pipelineresearch and petrochemicals.

MoU was signed with IIT Madras during the year for development of ahydro-kinetic energy conversion system and development of an Industrial version ofprototype NDT tool for creep damage detection in reformer heaters.

Your Corporation has setupthe ‘IndianOil Startup Fund'with a of innovative ideas in recurringcorpusof Rs. 30 crore for incubation technologyprocess and business process areas in the oil & gas sector. Ideas have been invitedthrough an advertisement on the web portal www.indianoilstartupfund.in launched inDecember 2016.

BUSINESS DEVELOPMENT

Over the years your Corporation has been expanding its business andhas consolidated its presence in areas beyond petroleum refining and marketing. It hasinvested in and built a portfolio that has strengthened its upstream and downstreamintegration and also expanded its footprints in the low-carbon energy space. Thesebusiness segments have contributed significantly to both the top-line and bottom-line ofthe Corporation and have emerged as key growth drivers with petrochemicals and gasbecoming a part of the Corporation's core business.

Petrochemicals

3 are under appraisal During the year 2016-17 the Corporation recordedhighest ever petrochemicals sales of 2.585 MMT as against 2.528 MMT in 2015- The 16 andmaintained its position as the second largest petrochemicals player in the country.

30

The Corporation is a major supplier of polymer products to leadingmultinationals.During the year 21 new Original Equipment Manufacturers' approvalswere obtained and the Product Application & Development Centre (PADC) of theCorporation furthered its efforts and rolled out nine improved grades onehigh-performance grade and one new grade. The Corporation's PROPEL brand nowhas strong international presence. The petrochemical products are exported to 73 countriesand polymers to 55 countries across the globe. During the year two new exportdestinations viz Myanmar and Egypt were added.

Natural Gas

Your Corporation has been investing chain and envisages greaterpresence in this segment in the future. During the year Regasified Liquefied Natural GasCorporation was 1.92 MMT. The Corporation now has in its 55 RLNG customers. Besidesinternal consumption of RLNG takes place in three of its own refineries.

The Corporation is implementing a 5-MMTPA LNG Import Storage andRegasification Terminal at Kamarajar Port Ennore near Chennai through a Joint VentureCompany (JVC) IndianOil LNG Pvt. Ltd. The terminal is scheduled to be commissioned in2018-19. The "coming on stream" of this first LNG regasification terminal on theeast coast would mark a major milestone in the Corporation's efforts to scale upnatural gas infrastructure in the country. The Corporationsuccessfully imported 11 LNGcargoes during the year. The Corporationalso signed 17 Master Sales & PurchaseAgreements with various international suppliers for import of LNG on spot/short-termbasis. In the Pacific North West (PNW) LNG Project in British Columbia Canada theCorporation's equity LNG now stands at 1.3 MMTPA on FOB-basis for a minimum of 20years. The Corporation has been participating in the building of City Gas Distribution(CGD) infrastructure in the country. In this business segment the Corporation has formedtwo JVCs namely Green Gas Ltd. (GGL) and IndianOil-Adani Gas Private Ltd. (IOAGL).Currently GGL operates two CGD networks one each at Lucknow & Agra. IOAGL isdeveloping CGD networks in seven geographical areas viz. Chandigarh Allahabad PanipatDaman Ernakulam Udhamsingh Nagar and Dharwad. During the year IOAGL's CGD networksin Chandigarh and Allahabad were commissioned.

Exploration & Production

The E&P portfolio of your Corporation

(including two Coal Bed Methane blocks) and 9 overseas blocks withparticipating interest ranging from 3.5% to 50%. Out of the 17 blocks 5 are underproduction (all overseas) 4 are under development (all domestic) (1overseas& 3domestic) 3 are under discovery (2 overseas & 1 domestic) and 2 are underexplorationphase (1 overseas & 1 domestic). blocks are located in 8 countries namelyCanada Gabon Libya Nigeria Russia USA Venezuela and Yemen.

During the year the Corporation's cumulative oil & gasproduction increased by 145% (from 8741 to 21402.8 Mboe) and per day oil & gasproduction from producing assets increased by 466% (from 9802 to 55514 Boe/d) on ayear-on-year basis. The Corporation's 2P reserve rose by 114% during the year to thelevel of 961.40 MMboe. During the year IndianOil participated in Discovered Small FieldBid Round 2016 and acquired 3 Contract Areas in which the Corporation is the soleoperator.

Alternative Energy

Your Corporation now has a portfolio of 188 MW of renewable energycomprising 168 MW of wind-power capacity and 20 MW of solar photovoltaic (PV) capacity.About 12 MW solar PV capacity was commissioned and 21 million units (kWh) generated fromsolar PV during the year which corresponds to an emission mitigation of 17 TMTCO2e(thousand metric tonnes carbon dioxide equivalent). During the year the Corporationgenerated 158 million units (kwh) from its wind-power units which corresponds to anemission mitigation of

131 TMTCO2e.

Under the Government of India's Swachh Bharat Abhiyanprogramme your Corporationis in the process of installing 10 waste-to-energy plants of 5tonnes per day capacity each to manage the municipal solid waste generated in Varanasicity. The first plant under the project was commissioned during the year and theelectricity generated from organic waste at this plant is being used to illuminate streetlights in the vicinity.

Sustainable Development

Your Corporation has been publishing Annual Sustainability Reportssince 2005-06. During the year its 11th Sustainability Report with the theme ‘Livingby our Core Values' was prepared in accordance with the ‘Comprehensive'requirements of the Oil & Gas Sector Supplement Global Reporting Initiative G4guidelines and the principles of the United Nations Global Compact.

Measurement management and disclosure of greenhouse gas emissions andclimate change data is an increasingly important aspect of standard business practice. Asdisclosure to Carbon Disclosure Project-India on Scope - 1 & 2 emissions andmitigation measures is being made since 2015-16.

Since 2014-15 the Corporation has been included in the CarbonDisclosure Leadership Index.

INFORMATION SYSTEMS & OPTIMISATION

Your Corporation took various introduced new features in existingmobile applications statistical modelling techniques etc. During the year intenseaudits were conducted to assess the security gaps in control systems. The SAP system inthe Corporation has been modified to be in readiness for GST implementation.

Duringtheyear Secondary

Dealer Management Solution (SDMS) Management (CRM) application inrobust platform to enable interaction with end-digital channels.

The Optimisation group in IndianOil carries out detailed analysis ofdemand forecast for purchase of suitable crude oil cargoes through term contracts or spotpurchases logistics arrangements export of products etc. to maintain supply ofproducts across the country as well as to optimise corporate

HEALTH SAFETY & ENVIRONMENT (HSE)

Your Corporation accords topmost priority to conducting its businesswith a strong environment conscience ensuring sustainable development safe workplacesand enrichment of the quality of life of its employees customers and the community atlarge. All refineries of your Corporation are certified to ISO:14064 standards Healthforsustainable development as well as for the Occupational & Safety Management System(OHSMS/OHSAS-18001) besides having fully equipped occupational health centres. Compliancewith on 31 safety systems and procedures and environmental laws is monitored attheunitdivisionandcorporatelevels.TheHSEactivities of the Corporation are reviewed inevery Board meeting. During the year safety audits were carried out at various officesand locations and various training programmes were also conducted across the Corporationcovering safety-related topics.

ENERGY CONSERVATION

Energy conservation is accorded very high importance at all IndianOilrefineries and units. The performance of the refineries is continuously monitored andefforts are made to keep abreast of the latest technological developments and global bestpractices. As a result of various energy conservation measures undertaken the energyperformance parameter (indexed to the complexity of operations) in terms of MBN* of therefineries of your Corporation during the year is down to 74.9 which is the best everachieved as against the energy index of 76.6 in the previous year. The energyconservation schemes implemented during the year resulted in an estimated fuel savings of19371 MT Standard Refinery Fuel (SRF) in the year valued at about ` 41.28 crore. Inaddition your Corporation also spreads the message of energy conservation throughworkshops and seminars besides conducting awareness campaigns for the benefit of retailand bulk consumers. *MBN Thousand British Thermal Units / Barrel / Energy Factorinitiatives during the year and (MBTU/BBL/NRGF)

HUMAN RESOURCES

The employee strength of the Corporation was 33135 as on 31.03.2017consisting of 16545 executives and 16590 non-executives. This includes 2735 womenemployees comprising 8.25% of the total work force. Your Corporation scrupulously followsthe presidential directives and Customer Relationship the Corporation to provide aguidelines issued by the Government of India regarding reservation in services forSC/ST/OBC/PWD (Persons with Disabilities)/ Ex- using servicemen to promote inclusivegrowth. Rosters are maintained as per the directives and are regularly inspected by theLiaison Officer(s) of the Corporation as well as the Liaison Officer of the Government ofIndia to ensure proper compliance. Grievance/ Complaint Registers are also maintained atDivision/ Region/ Unit levels for registering grievances from OBC/SC/ST employees. Effortsare made to promptly dispose of representations/grievances received from profitability.them. In accordance with the Presidential Directive the details of representation ofSC/ST/OBC in the prescribed format is attached at Annexure-I to the Report.

The provisions of 3% reservation for Persons with Disabilities in linewith guidelines/instructions issued being implemented in IndianOil. Furtherconcessions/relaxations in accordance with the rules in this regard are being extended tophysically challenged persons in recruitment. The number of employees with disabilities asst March 2017 was 586 i.e. 1.77 per cent of the total employee strength.

Your Corporation maintained cordial industrial relations during theyear and continued to provide comprehensive welfare facilities to its employees to takecare of their health efficiency economic betterment etc. and to enable them to givetheir best at the workplace. Your Corporation has always supported participative culturein the management of the enterprise through a consultative approach with the collectivesestablishing a harmonious relationship for industrial peace leading to higherproductivity. Employees'participation is also ensured through information-sharingwith collectives and employees on a regular basis while seeking their support suggestionsand cooperation. The efforts to promote employees' participation in management werecontinuedduring the year through Suggestions Scheme Total ProductivityMaintenance (TPM)and various employee engagement initiatives.

With the changing employee dynamics it is highly crucial to make youngofficers feel proud and take enhance the level of their motivation engagement and loyaltyto the organisation and to bring more agility and adaptability in the decision-makingprocess various unique interventions were initiated namely "BEST" (BuddingExecutive Search for Talent) Young Officers' Conclave and Youth Day celebrations.

As part of the ‘Investing in Our People' endeavourProject "Saksham" a structured leadership development programme wasdesigned (in consultation with IIMs) with a view to develop leadership competencies insync with the Corporation's leadership competency framework. Your Corporation emergedas one of the best employers in India in a study jointly conducted by The EconomicTimes & Great Place to Work Institute covering 791 Indian companies and morethan 1.5 lakh employees. IndianOil was declared as the 27th ranked company in India andthe 1st amongst Public Sector Companies in the 2017 listing of the ‘Top 50 BestCompanies to Work For' in India. This is an improvement over the 34th rank in 2016and 59th rank in 2015. Your Corporation is committed to diversity and inclusiveness andhas therefore adopted various practices development and gender equality in theorganisation. Women employees have equal opportunities equal rights and equalresponsibilities. Congenial work culture of your Corporation continues to inspire womenemployees to shoulder higher responsibilities in various verticals of the Corporation.Under the Forum of Women in Public Sector WIPS cell have been formed across IndianOilwhich focus on all-round development of women in the Corporation and render necessarysupport required by women employees. As part of its commitment to the development ofwomen your Corporation has been organising various training programmes on topics such asleadership skills health & safety work-life balance gender sensitivity etc.

The Corporation's efforts in women development have wonrecognition of WIPS as the Best Enterprise for Women Development for initiativesundertaken during the year 2016.

The provisions of Official Language Act 1963 and the rule framedOffices/Lo cations/Units thereunderarebeingcompliedwith 248 various divisions of IndianOilhave been notified under Section 10 (4) of Official Language Rule 1976. Further allcommunication received in Hindiandanyapplicationappealorrepresentationwritten or signedby an employee in Hindi is replied to in Hindi.

The various units/offices/locations journals and magazines inHindi/bilingual or trilingual languages. In order to undertake the Official Languageimplementation effectively Official Language functioning of implementation ofOfficialLanguage policies in thehas been and also the Annual Programme as circulated bythe Dept. of Official orming a part of the Annual Report. Language (Ministry ofHome Affairs) on a quarterly basis.

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

Your Corporationis women at workplace and takes prompt action in caseof reportingof such incidents. In this regard internalcomplaintscommittees have beenconstituted at various offices of the Corporation to deal sexual harassment complaints ifany and to conduct enquiries. There were four complaints of sexual harassment which werepending as on 1st April 2016. During the year seven complaints were received and fivecomplaints were disposed of. As on 31 st March 2017 six complaints are pending out ofwhich four are pending for more than 90 days.

Regular workshops are held for employees especially women to enhanceawareness about their rights and facilities at the work-place as well as the rightsavailable to them under the Act. During the year 32 workshops/awareness programmes wereconducted.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

A report on your Corporation's CSR activities as per theprovisions the Companies Act 2013 along with CSR Highlights during the year is attachedat Annexure-II to the report. The composition of the CSR Committee isprovided in the Corporate Governance Report. The CSR Policy of theCorporationcan beaccessed at the website of the pdf Corporation on the

VIGILANCE

The Vigilance department acts as a link between the organisation andChief Vigilance Commissioner. The objective of the vigilance function is to ensuremaintenance of the highest level of integrity throughout the Corporation. The Vigilancegroup takes preventive punitive participative steps with emphasis on the preventive andaspects. During the year 100 vigilance awareness programmes were conducted which wereattended by about 2700 employees. An on-line integrated data management-cum-monitoringsystem i.e. SVMS (Smart Vigilance Management System) has been developed to monitor theprogress of vigilance cases/matters more effectively and toensuretimely of action

PUBLIC DEPOSIT SCHEME

The Public Deposit Scheme of the Corporation was closed with effectfrom 31st August 2009. The total outstanding deposits as on 31.03.2017 were ` 55000/-.The Corporation has not invited any deposits from the public during the year. regularlybring out various in-house

CORPORATE GOVERNANCE REPORT work

Implementation Committees The Corporate Governance Report highlightingthe endeavours of your Corporation to adopt the best practices in ensuring transparencyintegrity and accountability in its functioning asaseparatesection

MANAGEMENT'S DISCUSSION & ANALYSIS REPORT

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

BUSINESS RESPONSIBILITY REPORT

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

AUDIT COMMITTEE

The Audit Committee of your Corporation comprised of three members allof whom are Independent Directors. The recommendations made by the Audit Committee duringthe year were accepted by the Board. terms Theother details of the Audit Committee likeits composition of reference meetings held etc. are provided in the CorporateGovernance Report.

CODE OF CONDUCT

The Board of your Corporation has enunciated a code of conduct for theDirectors and senior management personnel which has been circulated to all concerned andhas also been hosted on the Corporation's website. The Directors and seniormanagement ompliance with the code of conduct.affirmedc personnelhave

RISK MANAGEMENT

Your Corporation has a well laid-down risk assessment & managementprocess. A Risk Management Compliance Board comprising senior OfficermanagementpersonnelandheadedbyChiefRisk reviews the various risks associated with theCorporation's business. The Corporation has constituted a Risk Management Committeecomprising whole-time Directors which oversees risk management thereafter put up to theAudit Committee and the Board.

INTERNAL FINANCIAL CONTROLS

Your Corporation has put in place adequate internal financial controlsfor ensuring the efficient conduct of its business in adherence with laid-down policies;the safeguarding of its assets; the prevention and detection of frauds and errors; theaccuracy and completeness of the accounting records; and the timely preparation ofreliable financial information which is commensurate with the operations of theCorporation. The Corporation also has a separate Internal Audit department headed by anExecutive Director who directly reports to the Chairman. The Internal Audit departmenthas a mix of from finance and technical functions who carry out throughout the year. Thestatutory auditors are also required to issue the Independent Auditor's Report on theInternal Financial Controls of SectionoftheCorporation under Clause (i) of Sub-Section 143of the Companies Act 2013. The report issued thereupon has been attached alongwith theStandalone and Consolidated Financial Statements

REMUNERATION TO THE AUDITORS

The Office of the Comptroller & Auditor General of India hadappointed the Statutory Auditors for the financial year 2016-17. The Auditors'remuneration for the year 2016-17 has been fixed at` 145 lakhs plus applicable taxes. Inaddition reasonable out-of-pocket expenses incurred are also reimbursed at actuals.

COST AUDIT REPORT

Cost Auditors were appointed for conducting the cost audit of theCorporation's refineries lube blending plants and other units for the year 2016-17.A remuneration of ` 18.50 lakhs and applicable taxes had been fixed by the Board forpayment to the cost auditors for the year 2016-17 which was ratified by the shareholdersin the last AGM. The cost audit for the year 2015-16 was carried out for various units ofthe Corporation and the cost audit report was filed by the Central Cost Auditor with theCentral Government in the prescribed form within the stipulated time period. The costaudit report for FY 2016-17 would also be filed within the stipulated time.

SECRETARIAL AUDIT

The Secretarial Audit Report for the year 2016-17 confirms that theCorporation has complied with all the applicable provisions of the corporate lawsguidelines rules etc. The report duly certified by a practising Company Secretary isattached at Annexure-III to this Report.

The Secretarial Auditor has made an observation that the Corporationdoes not have the requisite number of non-Executive Directors and Independent Directors onits Board. Further it has been observed that the Corporation does not have a WomanDirector on its Board. In this regard it is clarified that the Corporation Company underthe administrative control of the Ministry of Petroleum & Natural Gas the selectionand appointment of Directors (including Independent Directors) vests with the Governmentof India as per the Government guidelines. The matter is being constantly pursued with theGovernment of India for appointment of the requisite number of Independent Directors andwoman Director.

PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES (MSEs) ORDER2012

Your Corporation has taken necessary steps for implementation of thePublic Procurement Policy of the Government of India for procurement from MSEs. Allefforts are being made to procure items specified for procurement from MSEs. Necessaryprovision has been officials made in all the tenders stating the eligibility of MSEs toparticipate in the tender. As against the target of 20 per cent for procurement from auditMSEs the actual procurement of your Corporation from MSEs during the year was 38.65 percent.

SUBSIDIARIES AND JOINT VENTURES

During the year a new joint venture company viz. Hindustan Urvarak& Rasayan Ltd. between IndianOil Coal India Ltd. NTPC Fertiliser Corporation ofIndia Ltd. (FCIL) and Hindustan Fertiliser Corporation Ltd. (HFCL) was formed for thepurpose of reviving and operating the fertiliser & chemical complexes at Gorakhpur& Sindri units of FCIL and the Barauni unit of HFCL. A new subsidiary company viz.IOC Singapore Pte. Ltd. was formed as aninvestmentcompanyinSingaporetoenableacquisitionofstake in E&P assets from Rosneft of Russia as well as to set up trading operations forprocurement of crude oil and import / export of petroleum products.

Your Corporation has divested 24% of its equity held in Lubrizol IndiaPvt. Ltd. (LIPL) in favour of Lubrizol Inc. U.S.A. thereby reducing its equity stake inLIPL to 26% with the balance 74% held by Lubrizol Inc U.S.A.

No subsidiary / joint venture company has ceased to exist during theyear. As required under the provisions of the Companies Act 2013 a statement on theperformance and financial position of each of the subsidiaries and joint venture companiesis provided as an annexure to the Consolidated Financial Statement. In accordance with theprovisions of the SEBI guidelines your Corporation has framed a policy for determiningmaterial subsidiaries which can be accessed on the Corporation's website at the linkhttps:// www.iocl.com/InvestorCenter/Policy_on_Material_Subsidiary.pdf

RELATED PARTY TRANSACTIONS (RPTs)

In line with the provisions of the Companies Act 2013 and SEBIguidelines a policy on material RPTs has been framed which can be accessed on thewebsite of the Corporation at link https://www.iocl.com/InvestorCenter/Policy_on_related_party_transactionspdf . Your Corporation hasundertaken transactionswithrelatedpartiesduring a Government the year in the ordinarycourse of business. In line with the RPT Policy approval of the Audit Committee/ Boardas the case may be was obtained for RPTs. During the year there was no material RPTs.The disclosures related to Related Party Transactions in accordance with applicableaccounting standards are provided at Note-31 of the Standalone Financial Statement.

REPORT ON ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS

In accordance with the provisions of the Companies Act 2013 and rulesframed thereunder particulars relating to Energy Conservation Technology Absorption andForeign Exchange earnings and outgo (on accrual basis) are annexed at Annexure-IVto the report.

PARTICULARS OF EMPLOYEES

As per the provisions of Section 197 of the Companies rules madethereunder Government companies are exempted from inclusion in the Directors' reportparticulars ofstatementofthe employees drawing remuneration in excess of limitsspecified under the Act and Rules notified thereunder.

No employee has

BOARD OF DIRECTORS

The following changes have occurred in the Board of the Corporation:-

1. Shri Debasis Sen ceased to be Director (Planning & BusinessDevelopment) w.e.f. 01.09.2016.

2. Shri B. Ashok ceased to be Chairman w.e.f. 01.06.2017.

3. Shri Ajay Sawhney ceased to be Government Director w.e.f.23.06.2017 upon his elevation as Secretary Ministry of Electronics and InformationTechnology Government of India and consequently ceasing to be an official of Ministry ofPetroleum & Natural Gas.

4. Shri Subroto Bagchi resigned from the Board due to his pre-occupationowing to other responsibilities w.e.f. 30.06.2017.

5. Shri G.K. Satish was appointed as Director (Planning & BusinessDevelopment) w.e.f. 01.09.2016

6. Dr. S.S.V. Ramakumar was appointed as Director (Research &Development) w.e.f. 01.02.2017

7. Shri Sanjiv Singh Director (Refineries) was appointed as Chairmanof the Corporation w.e.f. 01.06.2017.

The Corporation has received a all the Independent Directors confirmingprescribed for Independent Directors under the provisions of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI LoDR). Aseparate meeting of Independent Directors was held as per provisions of the Companies Act2013 and SEBI LoDR.

Shri Verghese Cherian and Shri Anish Aggarwal Directors are liable toretire by rotation and are eligible for re-appointment at the forthcoming Annual GeneralMeeting.

During the year 11 meetings of the Board of Directors were held. Thedetails of the meetings attended by each Director are provided in the Corporate GovernanceReport and hence not repeated here to avoid duplication.

No significant and material orders were passed by the regulators orcourts or tribunals that impact the going concern status of the Corporation and itsoperations in future.

VIGIL MECHANISM/WHISTLE-BLOWER POLICY

The Corporation has framed a whistle-blower policy wherein theemployees are free to report any improper activity resulting in violation of laws rulesregulations or code of conduct by any of the employees to the Competent Authority orChairman of the Act 2013 and Audit Committee as the case may would be reviewed by theCompetent Authority or Chairman of the Audit Committee. The policy provides that theconfidentiality of those reportingviolations shall be maintained and they shall not beensubjected to any discriminatory practice. denied access to the Audit Committee. The policyon Vigil Mechanism/ Whistle-Blower can be accessed on the Corporation's website atthe link https://www.iocl.com/InvestorCenter/Whistle_Blower_policy.pdf

DETAILS OF LOANS/INVESTMENTS/GUARANTEES

Your Corporationhas provided loans/guarantees to its subsidiaries/joint ventures and has made investments during the year in compliance with the provisionsof the Companies Act 2013. The details of such investments made and loans/guaranteesprovided as on 31st March 2017 are given in the Standalone Financial Statement underNotes 4 36 and 42.

EXTRACT OF ANNUAL RETURN

As required under the provisions of the Companies Act 2013 theextract of Annual Return for the financial year ended 31st March 2017 in the prescribedform MGT-9 is attached at Annexure-V to this report.

DIRECTORS' RESPONSIBILITY STATEMENT

(3) of Pursuant to the requirement under clause (c) of sub-sectionSec.134 of the Companies Act 2013 with respect to the Directors' ResponsibilityStatement it is hereby confirmed that: (a) in the preparationof the Annual Accounts theapplicable ofIndependencefrom accounting standards had been followed along with properthattheymeetthecriteria explanation relating to material departures; (b) the Directors hadselected such accounting them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the financialyear and of the profit and loss of the company for thatperiod; (c) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraudandother(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) the Directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively. (f) the Directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating

ACKNOWLEDGEMENTS

The Board of Directors would like to express its sincere appreciationof the dedicated efforts made by the employees of the IndianOil family in theCorporation's outstanding achievements during the year 2016-17. The Board would alsolike to thank the Government of India particularly the Ministry of Petroleum &Natural Gas and the various State Governments regulatory and statutory authorities fortheir valuable guidance and support. The Board is grateful to all its stakeholdersincluding bankers investors members customers consultants technology licensorscontractors vendors etc. for their continued support and confidence reposed in theCorporation. The Board would like to place on record its appreciation of the valuableguidance and significant contribution Shri B. Ashok Shri Ajay Sawhney and Shri SubrotoBagchi during their . tenure on the Board.

For and on behalf of the Board

(Sanjiv Singh) Chairman DIN: 05280701

Place: New Delhi Date : 21.07.2017

AWARDS & RECOGNITIONS

IndianOil retained its position as the top-ranked Indian company amongthe world's largest corporates in the prestigiousFortune ‘Global500' listing for 2017. The Company has also retained its top positionin the annualrankings of Business Today (BT-500) Businessworld (BW-500) Business Standard(BS-1000) The Economic Times (ET-500) and Financial Express (FE-1000) by netrevenue.

IndianOil's Refineries Headquarters at New Delhi became the firststand-alone office set-up in the world to win TPM Excellence Award-2016. The award waspresented at an exclusive function held in Kyoto Japan on 23rd March 2017.

IndianOil bagged the Reader's Digest Most Trusted BrandAward in the Petrol Stationcategory for the 10 th consecutive year.

Brand IndianOil was conferred Superbrand status for the fourthtwo-year term in a row by M/s. Superbrand India Pvt. Ltd. a leading global consumersurvey brand.

IndianOil won the 10th ExpressLogistics& Supply Chain

Leadership Award consecutively for the 9th time in a row in thecategory of "Excellence in Manufacturing Supply Chain Oil & Gas".

IndianOil's Supplies &Distributiondept. MarketingHO baggedthe Supply Chain and Logistics Excellence Award (SCALE Award) of the Confederation ofIndian Industry (CII).

IndianOil's Rural Cards initiative at KSK outlets bagged FlameAwards Silver Trophy instituted by the Rural Marketing Association of India (RMAI) underthe category "Channel Marketing/Retail Incentive

IndianOil bagged the Silver Award for "Outstanding Performance inCitizen-Centric Service Delivery" for the year

2016-17 a national award on e-Governance.

IndianOil bagged the prestigious Dun & Bradstreet Infra Award forexcellent project implementation of reverse osmosis plant at its Gujarat Refinery.

IndianOil's Panipat Refinery was awarded the first prize at theInternational Corrosion Forum "CORCON-2016" organised by NACE international induplex stainless steel tube bundles of crude distillation overhead exchangers."

Bongaigaon Refinery has been conferred the ‘BE StarRecognition-2016' as ‘Leader - Excellence in Operations Management' by CII.

Jawaharlal Nehru Centenary Award for Energy Performance ."(2014-15) for the Lowest Specific Energy Consumption (MBN) was presented toIndianOil's Mathura Refinery (Group 1) and Panipat Refinery (Group 2).

IndianOil's Bongaigaon Refinery won the Oil & Gas ConservationFortnight-2015 Award for Lowest Steam Leaks in Group-1 category.

Panipat Refinery bagged the CHT award for best performance in carbondioxide emissions for the year 2014-15.

Panipat Refinery won the prestigious 1 st Level NationalKaizen award inRenovative category for its Kaizen on the theme "Shockdosing Provision in PRE CoolingTowers" at the 27th

National Kaizen Conference held by CII TPM Club of India in June 2016.

Mathura Refinery was awarded "Safety Innovation Award 2016"by The Institution of Engineers Delhi State Centre.

IndianOil's Salaya-Mathura Pipeline received the Oil IndustrySafety Award instituted by the Oil Industry Safety Directorate under Crude Oil Pipelinescategory.

IndianOil also received Governance Now PSU Award 2016 (Jury'sChoice) for its overall CSR activities.

IndianOil won the National Talent Management Leadership Award-2016 atthe fifth edition in-Class Learning and Development instituted by World HRD Congress.

IndianOil bagged the ‘HR Innovation Awards 2016' in thecategory of ‘Best HR Team of the Year" at a ceremony organised by The Guild HTMint Connect CNBC TV18 and Talent Vouch.

IndianOil's Marketing Division bagged the ‘25th Global HRExcellence Awards 2017' in Times Ascent World HRD Congress in the category of‘Talent Management' from among 150 competitors.

IndianOil's Training & Development group in Marketing DivisionHO bagged the ‘National Talent Management Leadership Award 2016' in the categoryof ‘Best Onboarding Programme' Module (CCIM) for itsflagshipCommon CorporateInduction Mentoring and On-the- Marketing Induction Job Training Module.

IndianOil was adjudged as the ‘Best Enterprise' at the 27thPublic Sector (WIPS).National

ANNEXURE-I

SC/ST/OBC Report - I

Annual Statement showing the representation of SCs STs and OBCs as on1st January 2017 and number of appointments made during the preceding calender year

Name of the Public Enterprises: Representation of SCs/STs/OBCs

Indian Oil Corporation Ltd. Number of appointments made during the calendar year 2016

(As on 1.1.2017)

By Direct Recruitment

By Promotion

By Deputation/Absorption

Groups Total SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs
No. of
Employees
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Executives
A Non- executives 16708 2758 1208 3177 1638 277 117 586 3347 579 241 6 0 0
B 6036 1007 621 291 0 0 0 0 797 137 75 0 0 0
C 9827 1985 720 1851 549 97 54 213 1528 285 129 2 1 0
D (Excluding Sweeper) 691 132 53 274 67 13 5 23 0 0 0 0 0 0
D (Sweeper) 2 2 0 0 0 0 0 0 0 0 0 0 0 0
Total (Executives plus Non- executives) 33264 5884 2602 5593 2254 387 176 822 5672 1001 445 8 1 0

SC/ST/OBC Report - II

Annual Statement showing the representation of SCs STs and OBCs invarious Group A services as on 1 st January 2017 and number of appointments made in theservice in various grades in the preceding calender year

Name of the Public Enterprises: Representation of SCs/STs/OBCs

Indian Oil Corporation Ltd. Number of appointments made during the calendar year 2016

(As on 1.1.2017)

By Direct Recruitment

By Promotion

By Deputation/

Absorption

Pay Scale Total SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs
(in `) No. of
Employees
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
20600-46500 69 6 4 21 2 0 0 1 1 0 0 0 0 0
24900-50500 4934 789 344 1539 1636 277 117 585 332 57 23 1 0 0
29100-54500 3353 504 211 674 0 0 0 0 757 112 45 0 0 0
32900-58000 2979 546 260 532 999 196 87 3 0 0
36600-62000 1873 331 135 255 431 75 38 1 0 0
43200-66000 1378 305 141 134 334 72 26 1 0 0

No recruitment is made in this

51300-73000 1224 195 92 20 233 43 15 0 0 0

Group.

51300-73000 620 66 20 1 150 16 7 0 0 0
51300-73000 206 13 0 1 78 7 0 0 0 0
62000-80000 72 3 1 0 32 1 0 0 0 0
G.Total 16708 2758 1208 3177 1638 277 117 586 3347 579 241 6 0 0