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Indian Oil Corporation Ltd.

BSE: 530965 Sector: Oil & Gas
NSE: IOC ISIN Code: INE242A01010
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OPEN 102.85
PREVIOUS CLOSE 102.75
VOLUME 1635489
52-Week high 106.55
52-Week low 71.15
P/E 4.95
Mkt Cap.(Rs cr) 94,989
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 102.85
CLOSE 102.75
VOLUME 1635489
52-Week high 106.55
52-Week low 71.15
P/E 4.95
Mkt Cap.(Rs cr) 94,989
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indian Oil Corporation Ltd. (IOC) - Auditors Report

Company auditors report

To

The Members of Indian Oil Corporation Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements ofIndian Oil Corporation Limited ("the Company") which comprise the Balance Sheetas at March 31 2020 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information in which are incorporated thefinancial statements for the year ended on that date audited by the Branch Auditor of theCompany's one Branch namely Research & Development (R&D) division situated atFaridabad Haryana India.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the "Act") in the manner sorequired and give a true and fair view in conformity with Indian Accounting Standardsspecified under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2020 and profit totalComprehensive Income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those SAs are further described in the Auditors'Responsibilities for the Audit of the standalone financial statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.

Emphasis of Matter

We invite attention to Note No. 48 (12) of the standalone financialstatements which describes the impact of COVID-19- a global pandemic on the operations andfinancial matters of the Company.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report:

Key Audit Matters Auditors' response to Key Audit Matters
Property Plant & Equipment and Intangible Assets
There are areas where management judgement impacts the carrying value of property plant and equipment intangible assets and their respective depreciation/amortisation rates. These include the decision to capitalise or expense costs; the annual asset life review; the timeliness of the capitalisation of assets and the use of management assumptions and estimates for the determination or the measurement and recognition criteria for assets retired from active use. Due to the materiality in the context of the Balance Sheet of the Company and the level of judgement and estimates required we consider this to be as area of significance. We assessed the controls in place over the fixed asset cycle evaluated the appropriateness of capitalisation process performed tests of details on costs capitalised the timeliness of the capitalisation of the assets and the de-recognition criteria for assets retired from active use. In performing these procedures we reviewed the judgements made by management including the nature of underlying costs capitalised; determination of realizable value of the assets retired from active use; the appropriateness of assets lives applied in the calculation of depreciation; the useful lives of assets prescribed in Schedule II to the Act and the useful lives of certain assets as per the technical assessment of the management. We observed that the management has regularly reviewed the aforesaid judgements and there are no material changes.
Capital Work-in-Progress
The Company is in the process of executing various projects like expansion of refineries installation of new plants depots LPG bottling plants terminals pipelines etc. Since these projects take a substantial period of time to get ready for intended use and due to their materiality in the context of the Balance Sheet of the Company this is considered to be an area which had the significant effect on the overall audit strategy and allocation of resources in planning and completing our audit We performed an understanding and evaluation of the system of internal control over the capital work in progress with reference to identification and testing of key controls.
We assessed the progress of the project and the intention and ability of the management to carry forward and bring the asset to its state of intended use.
Provision for Direct Taxes
The Company has uncertain direct tax positions including matters under dispute which involves significant judgment relating to the possible outcome of these disputes in estimation of the provision for income tax. Because of the judgement required the area is a key audit matter for our audit. Our audit procedures involved assessment of the management's underlying assumptions in estimating the tax provision (as confirmed by the Company's tax consultants) and the possible outcome of the disputes taking into account the legal precedence jurisprudence and other rulings in evaluating management's position on these uncertain direct tax positions. We observed that the provision for tax estimated as above including the deferred tax has not resulted in material deviation from the applicable rate of tax after considering the exemptions deductions and disallowances as per the provisions of the Income Tax Act 1961.
Provisions and Contingent Liabilities
The Company is involved in various taxes and other disputes for which final outcomes cannot be easily predicted and which could potentially result in significant liabilities. The assessment of the risks associated with the litigations is based on complex assumptions which require the use of judgement and such judgement relates primarily to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings and to the adequacy of the disclosures in the standalone financial statements. Because of the judgement required the materiality of such litigations and the complexity of the assessment process the area is a key matter for our audit. Our audit procedures in response to this Key Audit Matter included among others
Assessment of the process and relevant controls implemented to identify legal and tax litigations and pending administrative proceedings.
Assessment of assumptions used in the evaluation of potential legal and tax risks performed by the legal and tax department of the Company considering the legal precedence and other rulings in similar cases.
Inquiry with the legal and tax departments regarding the status of the most significant disputes and inspection of the key relevant documentation .
Analysis of opinion received from the experts where available.
Review of the adequacy of the disclosures in the notes to the standalone financial statements.
Key Audit Matters Auditors' response to Key Audit Matters
Investments in Subsidiaries Joint Ventures and Associates
Investments in subsidiaries joint ventures and associates are valued at cost adjusted for impairment losses. In line with "Ind AS 36 Impairment of assets" in case there is an indication of possible impairment the Company carries out an impairment test by comparing the recoverable amount of the investments determined according to the value in use method and their carrying amount. The valuation process adopted by management is complex and is based on a series of assumptions such as the forecast cash flows the appropriate discounting rate and the growth rate. These assumptions are by nature influenced by future expectations regarding the evolution of external market. With reference to this key audit matter we considered the following:
Book value of the investments in subsidiaries joint venture and associates as compared to the carrying amount.
Market capitalization in case of listed entities in which investments have been made
Some of the entities are still in the construction stage and have not begun commercial operations
Based on the information and explanations obtained as above we concluded that the Management's judgement regarding indication of impairment in certain investments during the year is appropriate. Where there is indication of impairment we examined the approach taken by management to determine the value of the investments analysed the methods and assumptions applied by management to carry out the impairment test and the reports obtained from the experts in valuation.
Since judgement of the management is required to determine whether there is indication of possible impairment and considering the subjectivity of the estimates relating to the determination of the cash flows and the key assumptions of the impairment test the area is considered a key audit matter for our audit.
The following audit procedures were adopted:
Identification and understanding of the significant controls implemented by the Company over the impairment testing process; analysis of the reasonableness of the principal assumptions made to estimate their cash flows and obtaining other information from management that we deemed to be significant;
Analysis of actual data of the year and previous years in comparison with the original plan in order to assess the nature of variances and the reliability of the planning process;
Assessment of the reasonableness of the discount rate and growth rate;
Verification of the mathematical accuracy of the model used to determine the value in use of the investments.
We also examined the adequacy of the information provided by the Company about the impairment test and its consistency with the requirements of Ind AS 36.
Receivables from Airlines Customers
The Company has trade receivables from certain airlines. The increasing challenges over the economy and operating environment in the airline industry during the year have increased the risks of default on receivables from the Company's airline customers if they fail to meet their contractual obligations in accordance with the contracts. Our audit procedures included:
Testing the management's judgment with respect to recoverability of the dues from airline companies;
Perusing the confirmations from/reconciliations with the airline customers indicating that there are no material discrepancies or disputes;
The management has determined and assessed that these amounts are good of recovery considering the dues receivable from a government airline company and financial bank guarantees received from private airlines covering the amount due. Perusing the financial bank guarantees received from private airlines covering the amount due from them.
Considering the materiality of the amount involved we considered this as a key audit matter for our audit.
Key Audit Matters Auditors' response to Key Audit Matters
Adoption of Ind AS 116 "Leases"
The Company has adopted Ind AS 116 "Leases" in the current year. The application and transition to this Ind AS is complex and was an area of focus in our audit since the Company has a large number of leases with different contractual terms. Our audit procedures in response to this key audit matter included among others:
Assessed and tested new processes and controls in respect of the adoption of Ind AS 116;
Assessed company's evaluation on the identification of leases based on the contractual terms and nature of leases by testing a sample of contracts;
Adoption of this standard involves judgements and estimates including determination of the discount rates and the lease term. Additionally the standard mandates detailed disclosures.
Evaluated the method of transition and related adjustments;
Considering the materiality and significance of this item in overall context of the standalone financial statements this has been considered as a key audit matter. Tested completeness of the lease data by reconciling the Company's operating lease commitments to data used in computing ROU asset and the lease liabilities;
Evaluated the reasonableness of the discount rates applied in determining the lease liabilities;
Verified correctness of the recognition and measurement of Right of Use Assets and lease liabilities;
Evaluated the appropriateness of permitted practical expedients applied and exemptions availed;
Evaluated the reasonableness and completeness of presentation and disclosures relating to Ind AS 116.
Exceptional Item -write down of inventories to Net Realisable Value
The Company is consistently valuing its inventories at Cost or Net Realizable Value (NRV) whichever is lower. On account of unprecedented situation of lockdown from March 25 2020 precipitated by the outbreak of COVID-19 pandemic and consequent significant decline in demand for petroleum products the company has as a onetime measure considered a longer time period Net realizable value ("NRV") than its usual regular practice in respect thereof for better estimation of NRV considering the most reliable evidence available in line with the provisions of Ind AS 2 "Inventories". As a result the write down in inventories' value amounting to ^11304.64 crore has been recognised as exceptional item in the Statement of Profit and Loss. Our audit procedures in response to this key audit matter included among others:
Considered the impact COVID-19 that weighed on inventory valuation;
Assessed the Company's determination of Net Realizable Value (NRV) as per Ind AS 2 " Inventories";
Compared the net realisable value (NRV) with cost of inventories appearing as on March 31 2020;
Determined the correctness of the computation of amount written down from the value of inventories;
Tested the appropriateness of management's assertion to treat Inventories' write down to Net Realizable Value (NRV) as an exceptional item and evaluated the reasonableness and completeness of presentation and disclosures.
Considering the materiality and significance of this item in overall context of the standalone financial statements this has been considered as a key audit matter.

Information Other than the Standalone Financial Statements andAuditors' Report Thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theFinancial Performance highlights Board's Report including Annexure to Board's ReportManagement Discussions and Analysis Business Responsibility Report Report on CorporateGovernance Shareholders Information and other information in the Integrated Annual Reportbut does not include the standalone financial statements and our auditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

If based on the work we have performed on the other information thatwe obtained prior to the date of auditors' report we conclude that there is a materialmisstatement of this information we are required to report that fact. We have nothing toreport in this regard.

When we read the other information which we will obtain after the dateof auditors' report and if we conclude that there is material misstatement therein we arerequired to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Indian Accounting Standards specified under section 133 of the Actand the other accounting principles generally accepted in India. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the management either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditors' Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditors' report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement ofthe standalone financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to FinancialStatement in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the ability of the Company to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditors' report tothe related disclosures in the standalone financial statements or if

such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditors' report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content ofthe standalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matters

a) We did not audit the standalone financial statements of one Branchincluded in the standalone financial statements of the Company whose financial statementsreflect total assets of ^959.72 crore as at March 31 2020 and total revenues of ^29.50crore for the year ended on that date as considered in the standalone financialstatements. The financial statements of this Branch have been audited by the BranchAuditor whose report has been furnished to us and our opinion in so far as it relates tothe amounts and disclosures included in respect of this Branch is based solely on thereport of such Branch Auditor.

The standalone financial statements include the Company's proportionateshare (relating to Jointly controlled operations of E&P activities) in assets ^652.92crore and liabilities ^149.30 crore as at March 31 2020 and total revenue of ^154.87crore and total net profit before tax of Rs86.68 crore for the year ended onthat date and elements making of the statement of cash flow and related disclosurescontained in the enclosed standalone financial statements. Our observations thereon arebased on unaudited statements from the operators to the extent available with the Companyin respect of 25 joint operations (out of which 10 block are relinquished) and have beencertified by the management.

Our opinion in respect thereof is solely based on the managementcertified information.

We have also placed reliance on technical / commercial evaluations bythe management in respect of categorization of wells as exploratory development and drywell allocation of cost incurred on them liability under New Exploration LicensingPolicy (NELP) and nominated blocks for under-performance against agreed Minimum WorkProgramme.

b) The standalone financial statements of the Company for the yearended March 31 2019 were audited by joint auditors of the Company three of whom were thepredecessor audit firms and they have expressed an unmodified opinion vide their reportdated May 17 2019 on such standalone financial statements.

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 Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the "Annexure 1" a statement on thematters specified in the paragraphs 3 and 4 of the said Order to the extent applicable.

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"Annexure 2" on the directions issued by the Comptroller and Auditor General ofIndia.

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 have beenkept by the Company so far as it appears from our examination of those books and properreturns adequate for the purpose of our audit have been received from the Branch notvisited by us.

c) The report on the accounts of the Branch office of the Companyaudited under section 143(8) of the Act by Branch Auditor has been furnished to us andhas been properly dealt with by us in preparing this report.

d) The Balance Sheet the Statement of Profit and Loss (including OtherComprehensive Income)Statement of changes in Equity and the Statement of Cash Flows dealtwith by this Report are in agreement with the books of account and with the returnsreceived from the Branch not visited by us.

e) In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act.

f) We have been informed that the provisions of Section 164(2) of theAct in respect 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 issuedby Ministry of Corporate Affairs Government of India.

g) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure 3".

h) With respect to the other matters to be included in the Auditors'Report in accordance with the requirements of section 197(16) of the Act as amended:

We are informed that the provisions of Section 197 read with Schedule Vof the Act relating to managerial remuneration are not applicable to the Company being aGovernment Company in terms of Ministry of Corporate Affairs Notification no. G.S.R. 463(E) dated 5th June 2015.

i) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements-Refer Note 36B to the standalonefinancial statements.

ii. The Company has made provision as required under the applicablelaw or Indian accounting standards for material foreseeable losses if any on long termcontracts including derivative contracts-Refer Note 17 to the standalone financialstatements

iii. There has been no delay in transferring the amount required to betransferred to the Investor Education and Protection Fund by the Company.

For G. S. MATHUR & CO. For K. C. MEHTA & CO. For SINGHI & CO. For V. SINGHI & ASSOCIATES
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. 008744N Firm Regn. No. 106237W Firm Regn. No. 302049E Firm Regn. No. 311017E
Sd/- Sd/- Sd/- Sd/-
(Rajiv Kumar Wadhawan) (Vishal P. Doshi) (Shrenik Mehta) (Aniruddha Sengupta)
Partner Partner Partner Partner
M. No. 091007 M. No. 101533 M. No. 063769 M. No. 051371
UDIN: UDIN: UDIN: UDIN:
20091007AAAABF8966 20101533AAAABU3517 20063769AAAAAO3933 20051371AAAABA7360
New Delhi Vadodara Kolkata Kolkata
Date: June 24 2020

ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT

Annexure referred to in Independent Auditors' Report to themembers of Indian Oil Corporation Limited on the standalone financial statements for theyear ended March 31 2020

(i) (a) The Company has generally maintained proper records showingfull particulars including quantitative details and

situation of fixed assets.

(b) There is a regular programme of physical verification of all fixedassets other than LPG cylinders and pressure regulators with customers over a period ofthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its fixed assets. In our opinion and as per the information given by theManagement the discrepancies observed were not material and have been appropriatelyaccounted for in the books.

(c) According to the information and explanations given to us and onthe basis of our examination of records of the Company the title/ lease deeds of theimmovable properties are held in the name of the Company except in cases given below:

Particulars Number of cases Gross Block/ Value in Crore) Net Block/ Value (^ in Crore)
Freehold
Freehold Land 18 407.52 407.52
Freehold Building 7 5.58 4.81
ROU assets
Leasehold Land 109 586.91 499.42
Leasehold Building 1 20.42 19.73

(ii) According to the information and explanations given to us theinventory (excluding inventory lying with third parties inventory under joint operationsand material in transit) has been physically verified by the management during the yearand in our opinion the frequency of verification is reasonable. As explained to us nomaterial discrepancies were noticed on physical verification of inventories as compared tothe book records.

(iii) In our opinion and according to the information and explanationsgiven to us the Company has not granted any loans secured or unsecured during the yearto any companies firms and limited liability partnerships or other parties covered inregister maintained under Section 189 of the Act.

In view of the above reporting under clause 3 (iii)(a) 3 (iii)(b) and3 (iii)(c) of the Order is not applicable.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and Section 186of the Act with respect to the loans investments guarantees and securities.

(v) In our opinion and according to the information and explanationsgiven to us during the year the Company has not accepted deposits from the public interms of the provisions of sections 73 to 76 of the Act read with the Companies(Acceptance of Deposits) Rules2014 as amended and other relevant provisions of the Actand no deposits are outstanding at the yearend except old cases under dispute aggregatingto ^ 0.01 crore where we are informed that the Company has complied with necessarydirections.

(vi) We have broadly reviewed the accounts and records maintained bythe Company pursuant to the Rules made by the Central Government for the maintenance ofcost records under sub-section (1) of Section 148 of the Act read with Companies (CostRecords& Audit) Rules 2014 as amended and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madedetailed examination of the records with a view to determine whether they are accurate andcomplete.

(vii) (a) Undisputed statutory dues including provident fundemployees' state insurance income tax sales-tax value

added tax service tax duty of custom duty of excise goods andservice tax cess and other statutory dues have generally been regularly deposited withthe appropriate authorities and there are no undisputed dues outstanding as on March 312020 for a period of more than six months from the date they became payable.

(b) The disputed statutory dues that have not been deposited on accountof matters pending before appropriate authorities are annexed in "Appendix A"with this 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 Government or debenture holders.

(ix) According to the information and explanations given to us theCompany has applied the term loans for the purpose for which those were obtained. Duringthe year the Company has not raised moneys through initial public offer or further publicoffer (including debt instruments). However the Company has issued non-convertibledebentures for capital expenditure requirements in the domestic market and as per theinformation and explanations given to us the funds were applied for the purpose for whichthose were raised.

(x) According to the information and explanations given to us and asrepresented by the Management and based on our examination of the books and records of theCompany and in accordance with generally accepted auditing practices in India no materialcase of frauds by the Company or on the Company by its officers or employees has beennoticed or reported during the year.

(xi) The provisions of Section 197 read with Schedule V of the Actrelating to managerial remuneration are not applicable to the Company being a GovernmentCompany in terms of Ministry of Corporate Affairs Notification no. G.S.R. 463 (E) dated5th June 2015.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company and therefore the reporting under Clause3 (xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven by the management all transactions during the year with the related parties wereapproved by the Audit Committee and are in compliance with section 177 and 188 of the Actwhere applicable and the details have been disclosed in the standalone financialstatements as required by the applicable Indian accounting standards.

(xiv) According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year and therefore provisions of Section 42 ofthe Act are not applicable to the Company.

(xv) In our opinion and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions specified undersection 192 of the Act with directors or persons 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 G. S. MATHUR & CO. For K. C. MEHTA & CO. For SINGHI & CO. For V. SINGHI & ASSOCIATES
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. 008744N Firm Regn. No. 106237W Firm Regn. No. 302049E Firm Regn. No. 311017E
Sd/- Sd/- Sd/- Sd/-
(Rajiv Kumar Wadhawan) (Vishal P. Doshi) (Shrenik Mehta) (Aniruddha Sengupta)
Partner Partner Partner Partner
M. No. 091007 M. No. 101533 M. No. 063769 M. No. 051371
UDIN: UDIN: UDIN: UDIN:
20091007AAAABF8966 20101533AAAABU3517 20063769AAAAAO3933 20051371AAAABA7360
New Delhi Vadodara Kolkata Kolkata
Date: June 24 2020

ANNEXURE 2 TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in Paragraph 2 under "Other legal and regulatoryrequirements "of our report of even date)

Sl. No Directions Action Taken Impact on standalone financial statements
1 Whether the company has system in the place to process all the accounting transactions through it system? If yes the implications of processing of accounting transaction outside IT system on the integrity of the accounts along with the financial implications if any may be stated. The Company has a robust ERP system (SAP) to process all the accounting transactions through IT system. Nil
2 Whether there is any restructuring of an existing loan or cases of wavier/write off of debts/loans/interest etc. made by a lender to the company due to the company's inability to repay the loan? If yes financial impact may be stated The Company has been regular in discharging its principal and interest obligations on various loans during 201920. Therefore there are no cases of restructuring of any loan or cases of waiver/ write off of debts/ loans/ interest etc. made by any lender due to the company's inability to repay the loan. Nil
3 Whether funds received/receivable for specific schemes from central/state agencies were properly accounted for /utilized as per its term and conditions? List the cases of deviation. The Company has properly accounted for/utilized funds received/receivable for specific schemes from central/state agencies as per its term and conditions Nil

 

For G. S. MATHUR & CO. For K. C. MEHTA & CO. For SINGHI & CO. For V. SINGHI & ASSOCIATES
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. 008744N Firm Regn. No. 106237W Firm Regn. No. 302049E Firm Regn. No. 311017E

 

Sd/- Sd/- Sd/-

M Sd/- ^ ~ (Aniruddha Sengupta)

(Rajiv Kumar Wadhawan) (Vishal P. Doshi) (Shrenik Mehta)
Partner Partner Partner Partner
M. No. 091007 M. No. 101533 M. No. 063769 z o o CJl 00 -vj art
UDIN: UDIN: UDIN: c o z Rep<
20091007AAAABF8966 20101533AAAABU3517 20063769AAAAAO3933 ro o o CJl 00 > > > > 00 > 00 O) o ines; ility
New Delhi Vadodara Kolkata

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Date: June 24 2020 ince Re;

ANNEXURE 3 TO THE INDEPENDENT AUDITORS' REPORT

Annexure referred to in Independent Auditors' report of even dateto the members of Indian Oil Corporation Limited on the standalone financial statementsfor the year ended March 31 2020

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

We have audited the internal financial controls with reference tofinancial statements of Indian Oil Corporation Limited ("the Company") as ofMarch 31 2020 in conjunction with our audit of the standalone 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 with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe 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 as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note on Audit of Internal Financial Controlsover Financial Reporting (the "Guidance Note") and the Standards on Auditingissued by ICAI and prescribed under section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls with reference to Financial Statement and both issued by the Instituteof Chartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements were established and maintained and if such controls operated effectively inall material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditors'judgement including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols with reference to financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with the generally accepted accounting principles. A company'sinternal financial control with reference to financial statements includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company are beingmade only in accordance with authorisations of management and directors of the company;and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2020 based on the internal financial control with reference to financialstatements established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the ICAI.

Other Matters

Our aforesaid report under section 143(3)(i) of the Act on the adequacyand operating effectiveness of the internal financial controls with reference to financialstatements in so far as it relates to one Branch audited by the Branch Auditor is basedon the corresponding report of the Branch Auditor.

For G. S. MATHUR & CO. For K. C. MEHTA & CO. For SINGHI & CO. For V. SINGHI & ASSOCIATES
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. 008744N Firm Regn. No. 106237W Firm Regn. No. 302049E Firm Regn. No. 311017E

 

Sd/- Sd/- Sd/- Sd/-
(Rajiv Kumar Wadhawan) (Vishal P. Doshi) (Shrenik Mehta) (Aniruddha Sengupta)
Partner Partner Partner Partner
M. No. 091007 M. No. 101533 M. No. 063769 M. No. 051371
UDIN: UDIN: UDIN: UDIN:
20091007AAAABF8966 20101533AAAABU3517 20063769AAAAAO3933 20051371AAAABA7360
New Delhi Vadodara Kolkata Kolkata
Date: June 24 2020

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