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Indian Oil Corporation Ltd.

BSE: 530965 Sector: Oil & Gas
NSE: IOC ISIN Code: INE242A01010
BSE 00:00 | 03 Dec 121.90 1.35
(1.12%)
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121.85

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122.90

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120.75

NSE 00:00 | 03 Dec 122.20 1.55
(1.28%)
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122.85

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OPEN 121.85
PREVIOUS CLOSE 120.55
VOLUME 856591
52-Week high 141.75
52-Week low 84.20
P/E 4.41
Mkt Cap.(Rs cr) 114,759
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 121.85
CLOSE 120.55
VOLUME 856591
52-Week high 141.75
52-Week low 84.20
P/E 4.41
Mkt Cap.(Rs cr) 114,759
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indian Oil Corporation Ltd. (IOC) - Director Report

Company director report

Dear Shareholders

On behalf of the Board of Directors of IndianOil it is my privilege topresent the 62nd Annual Report and the Fourth Integrated Annual Report of the Company forthe financial year ended March 31 2021 along with the Audited Standalone andConsolidated Financial Statements and Auditor's Report thereon.

The year stood testimony to the grit and perseverance of IOCians whoscripted success stories despite the challenges unleashed by the Covid-19 pandemic. It wasthe ‘never-say-die' spirit and the indomitable courage of the Company'sfrontline warriors across the entire supply chain that kept India as well as IndianOil onthe move during this unprecedented crisis in modern human history. The Company not onlymaintained the supply of petroleum products across the country but also exceeded thetough capital expenditure target for expanding its infrastructure and strengthening itsbusiness goals by launching innovative products and services in the retail space.

As the country faced challenges posed by Covid-19 IndianOil stood firmby its philosophy of ‘Pehle Indian Phir Oil'. When the world came to astandstill IndianOil stopped at nothing. In addition to its ‘business as usual'approach IndianOil stood at the forefront of the pandemic and with a humanitarianapproach leveraged it's resources of money material and workforce. When the entirecountry was reeling under the second wave of Covid-19 infections the Company continued toserve silently taking several initiatives towards Covid-19 management and Liquid Oxygen(LOx) arrangement.

Performance Review

Financial

The Company registered its highest ever net profit on the back of highinventory gains healthy petrochemicals margin and low finance cost. The summarisedstandalone performance and appropriations for 2020-21 are given below:

2020-21 2019-20
Particulars US$ Million Rs Crore US$ Million Rs Crore
Revenue from Operations 69374 514890 79892 566354
(Inclusive of Excise Duty & Sale of Services)
EBITDA 5742 42614 3154 22356
(Profit Before Exceptional Items Finance Cost Tax Depreciation
& Amortisation)
Finance Cost 417 3094 843 5979
Depreciation 1321 9804 1237 8766
Profit Before Tax & Exceptional Items 4004 29716 1074 7611
Exceptional Items - - (1595) (11305)
Profit Before Tax 4004 29716 (521) (3694)
Tax Provision 1062 7880 (706) (5007)
Profit After Tax 2942 21836 185 1313
Interim Dividend paid 1299 9640 550 3902
Final Dividend paid - - 130 918
Dividend Distribution Tax - - 139 986
Insurance Reserve (Net) 1 11 3 20
General Reserve 1642 12185 (637) (4513)
Balance Carried to Next Year - - - -

SHARE VALUE

2020-21 2019-20
US$ Rs US$ Rs
Cash Earnings Per Share 0.46 34.46 0.15 10.98
Earnings Per Share 0.32 23.78 0.02 1.43
Book Value Per Share 1.65 120.36 1.35 102.13

Note: Exchange Rate used

For 2020-21: Average Rate 1 US$ = Rs 74.22 and Closing Rate 1 US$ = Rs73.12 as on March 31 2021 For 2019-20: Average Rate 1 US$ = Rs 70.89 and Closing Rate 1US$ = Rs 75.67 as on March 31 2020

The macro-economic geo-political financial industry-specificinformation and markets in which the Company operates are provided in the ManagementDiscussion and Analysis section which forms a part of this Integrated Annual Report.

Issue of Securities / Changes In Share Capital

There was no change in the share capital of the Company during theyear. However the Company issued Unsecured Rated Listed Taxable RedeemableNon-Convertible Debentures (NCDs) aggregating to Rs 7915.20 Crore on private placementbasis which were listed on the Debt Segment of the NSE and BSE. The funds were utilisedfor the purpose for which they were raised and there were no deviations or variations intheir utilisation.

Dividend

The Board of the Company has formulated a Dividend Distribution Policyand the dividends declared / recommended during the year were in accordance with the saidpolicy. The policy is hosted on the website of the Company at: https://www.iocl.com/download/Policies/Dividend-Distribution-Policy.pdf

During the year the Company paid a first interim dividend of Rs 7.50per share and a second interim dividend of Rs 3.00

per share. In addition the Board of the Company has recommended afinal dividend of Rs 1.50 per share for the year thereby taking the total dividend forthe year to Rs 12 per share with a total pay-out of Rs 11017.25 Crore equivalent to50.50% of the PAT.

This is the 54th consecutive year of dividend declaration with totalpayout of Rs 74937 Crore (including the proposed final dividend for the year 2020-21)

Contribution to Exchequer

Over the years the Company has been the largest contributor to theGovernment exchequer in the form of duties taxes and dividend. During the year Rs238786 Crore was paid to the exchequer as against Rs 182067 Crore paid in the previousyear an increase of 31% over the previous year. An amount of Rs 153827 Crore waspaid to the Central Exchequer and Rs 84959 Crore to the States Exchequer comparedto Rs 96104 Crore and Rs 85963 Crore paid in the previous year respectively.

Consolidated Financial Performance

In accordance with the provisions of the Companies Act 2013 and theAccounting Standards issued by the Institute of Chartered Accountants of India theCompany has prepared the Consolidated Financial Statement for the group includingsubsidiaries joint venture entities and associates. The highlights of the ConsolidatedFinancial Results are shared below:

2020-21 2019-20
Particulars
(US$ Million) (K Crore) (US$ Million) (K Crore)
Revenue from Operations 70094 520237 81251 575990
(Inclusive of Excise Duty & Sale of Services)
Profit Before Tax 4143 30751 (1012) (7177)
Profit After Tax 2932 21762 (265) (1876)
Less: Share of Minority 17 124 (139) (983)
Profit for the Group 2915 21638 (126) (893)

Note: Exchange Rate used

For 2020-21: Average Rate 1 US$ = Rs 74.22 For 2019-20: Average Rate 1US$ = Rs 70.89

Operational Performance

The summary of the operational performance of your Company is as under:

(in MMT)
Particulars 2020-21 2019-20
Refineries Throughput 62.35 69.42
Pipelines Throughput 76.02 85.35
Product Sales 81.03 89.70
(inclusive of Gas Petrochemicals & Exports)

Refineries

The spread of Covid-19 and the resultant lockdown as well as otherrestrictions severely impacted the entire value chain of petroleum products andtherefore refineries had to operate at lower levels compared to the previous years. Therefineries showed tremendous resilience and passion to strive during these difficult timesby optimising operations to meet skewed product demand. While demand for major petroleumproducts decreased drastically demand for cooking gas increased and refinery operationswere accordingly tuned for LPG maximisation despite reduction of crude throughput. Due togrounding of the aviation operations jet fuel (ATF) production had to be reduceddrastically and the streams were diverted to the diesel pool. Consequently theperformance parameters of capacity utilisation distillate yield and energy performancewere lower than that of 2019-20.

Petrochemicals posted encouraging numbers with naphtha throughputtouching 2.67 MMT which was 11% higher than the annual target of 2.4 MMT. The overallpolymer production (Polyethylene + Polypropylene) clocked 1.5 MMT while overcoming highstocks (due to low dispatches) and low feed availability from reduced refinery operations.LAB production was aligned to meet the increased demand of sanitation products. 134 TMT ofLAB was produced achieving 100% prime percentage continuously for 16 months.

The Company's Panipat Naptha Cracker (PNC) plant was recognised asone of the ‘Excellent Energy Efficient Units' by the Confederation of IndianIndustries (CII). PNC Polypropylene

Units ranked first in internal stream factor globally out of 54licensees in the Spheripol Benchmarking Survey 2019 for Polypropylene units undertaken bylicensor M/s Basell. The High Density Poly Ethylene (HDPE) unit ranked second in bothprime percentage and specific steam consumption out of 19 licensees in the GlobalBenchmark Survey 2019 carried out by Licensor M/s Basell.

India's first batch of the premium gasoline XP100was produced from the Mathura Refinery using high octane streams from in-houseresearched and developed Octamax technology. Subsequently other refineries alsoproduced the XP100 gasoline to meet the countrywide demand. With this endeavour theCompany catapulted India globally to a select league of nations with such superior qualityfuel.

During the year 16 new crude oil grades were included in theCompany's basket increasing its size to 201 crudes. Over the years the share ofNorth and South American crude oil grades processed by the Company has increased standingat 10.1% during 2020-21 thereby improving the flexibility in operations and resilience incrude purchases.

The Company commissioned a new state-of-the-art INDMAX and Prime-Gunit at Bongaigaon (Assam) a new NHT and CCRU unit at Barauni (Bihar) new DHDT units atthe Haldia Refinery (West Bengal) and new DHDT and HGU units at its Panipat and Gujaratrefineries for improving the bottom line and efficiency of the refineries. The thirdINDMAX unit at the Bongaigaon Refinery was dedicated to the nation by the Hon'blePrime Minister on February 22 2021.

Refinery expansion coupled with value-added products and petrochemicalintegration are the fundamental tenets of the future growth strategy of your Company.Apart from expanding the capacities of its refineries at Panipat (15 to 25 MMTPA) Gujarat(13.7 to 18 MMTPA) Barauni (6.0 to 9.0 MMTPA) and Guwahati (1.0 to 1.2 MMTPA) yourCompany has decided to establish a

9 MMTPA greenfield Cauvery Basin Refinery in a joint venture withChennai Petroleum Corporation Limited (a subsidiary) at Nagapattinam in Tamil Nadu. Allrefinery expansion with petrochemical and lube integration projects along with otherapproved capital expenditure (capex) plans translate into an investment commitment ofclose to Rupees One LakRs Crore in the next four to five years aimed at a high growthtrajectory.

In line with the National Vision of Energy Security and the ParisAgreement your Company has been working on potential opportunities for developing CarbonCapture Utilisation and Storage (CCUS) projects from its various refineries as anemissions mitigation tool for combating climate change and involving the injection ofcarbon dioxide into oil reservoirs for enhanced oil recovery (EOR) in India.

Pipelines

The Company continued to expand its pipeline network during the yearand crossed yet another milestone of 15000 Km with a combined throughput capacityof 94.56 Million Tonnes per annum for crude oil / product and 21.69 MMSCMD for gaspipelines. During the year the crude oil pipelines achieved a throughput of 44.13 MMT andproduct pipelines achieved a throughput of 31.89 MMT. The lower throughput of product andcrude pipelines was mainly due to drop in demand caused by Covid-19. However gaspipelines achieved the highest ever throughput of 2691 MMSCM which is 12% higher thanthe throughput of 2400 MMSCM achieved during 2019-20. Your Company continued todemonstrate efficient pipeline operation by achieving a reduction of 13.5% in SpecificEnergy Consumption (SEC) vis--vis last year.

Your Company commissioned a 337 Km pipeline during the yearwhich was dedicated to the nation by the Hon'ble Prime Minister of India. Apart fromthe commissioning of the Durgapur–Banka (193 Km) section of theParadip–Haldia–Durgapur LPG pipeline project and theRamanathapuram–Tuticorin section (143.5 Km) of theEnnore–Thiruvallur–Bengaluru–Puducherry–Nagapattinam–Madurai–Tuticorinnatural gas pipeline capacity augmentation of the Panipat–Bhatinda pipeline was alsocompleted during the year.

Your Company is executing pipeline projects worth Rs 25300 Crorewhich are under various stages of implementation. Commissioning of these projects will addaround 6600 Km to the existing pipeline network leading to a total pipeline networklength of 21000 Km with liquid pipeline capacity of approximately 137 MMTPA and gaspipeline capacity of approximately 51.70 MMSCMD. Your Company also bagged the consultancywork for the 2805-Km long Kandla–Gorakhpur LPG pipeline one of the world'slongest LPG pipelines.

It is a matter of pride to inform you that the meticulous efforts ofyour Company in ensuring safe and continuous operations of its vast network of pipelinesand vital offshore crude handling systems were recognised and the Pipelines Division wasbestowed with the ‘Oil & Gas Transportation Company of the Year – 2020'award by the Federation of Indian Petroleum Industry (FIPI).

Marketing

Amid the lockdown and intermittent travel restrictions during the yearyour Company continued to serve the nation by ensuring uninterrupted supply of petroleumproducts across the country. Domestic sale of 69.35 MMT of petroleum products wasregistered during the year as against 78.54 MMT registered in the previous year. TheCompany served around 2.25 Crore customers daily at its retail outlets and deliveredaround 27 Lakhs LPG cylinders per day to fulfil the energy requirement of India'scitizens.

During the year your Company commissioned 3000 retail outlets (ROs)which was the highest ever by any Oil Marketing Company. To promote new age fuellingtrends the Company has already commissioned 637 Door-to-door delivery mobile dispensersfor diesel.

In a step towards green energy during the year 5.95% blending ofethanol with petrol was achieved. Further your Company is upgrading its supply and retailinfrastructure to achieve the Government of India's aggressive target of 20% ethanolblending by 2023. Recently on the occasion of World Environment Day on June 5 2021 theHon'ble Prime Minister launched the ambitious pilot rollout of bio-fuel E100 i.e.100% ethanol from your Company's retail outlet at Pune.

To promote alternative fuels your Company added 310 new CNG 17Compressed Biogas (CBG) 205 electric vehicle (EV) charging and 27 battery swappingstations during the year. As of the close of the year the Company was operating 1059CNG 21 CBG 257 EV charging and 29 battery swapping stations in the country.

India's first super premium petrol XP100 with an octanevalue of 100 was launched by the Company during the year. Currently XP100 is being soldthrough 87 ROs across 46 cities.

Subsequently in May 2021 XP95 (95 Octane Premium Petrol) waslaunched to enable automobile manufacturers accelerate automobile development to meet theCorporate Average Fuel Efficiency (CAFE) and BS-VI Stage 2 norms that will come intoeffect from 2022.

In an initiative towards promoting women's empowerment in thedistribution network 83 all-women retail outlets were launched across Indiaduring the year. Your Company decided to percolate this culture into every corner of thecountry by increasing the share of space for women at the Company's forecourts andcustomer touch points.

To benchmark digital experience at the forecourt initiatives like the IntegratedTransaction Processing System (ITPS) and Secondary Dealer Management System (SDMS)were launched which will ensure linkage of payment with actual delivery of fuel andloyalty programme through automation with a single PoS terminal for acceptance of CC DCUPI Bharat QR Wallets XTRAREWARDS XTRAPOWER etc. Currently implemented at over 3000ROs the same will be expanded to over 30000 ROs by end of this year.

In an endeavour to have a rejuvenated feel of ROs with variousvalue-added services newly designed Retail Visual Identity (RVI) elements werepiloted at four ROs in the National Capital of New Delhi. Scale up has been planned acrossmajor cities at identified ROs for wider feedback and pan India rollout soon.

Your Company achieved the highest ever LPG sale of 12.96 MMT during theyear and released more than 38 Lakhs new LPG connections. To improve customer reach andcustomer satisfaction in services the Company commissioned 293 new LPG distributorshipstaking their total number to 12726.

Among various initiatives for the convenience of LPG customers acountrywide 24X7 common booking number (7718955555) for LPG refills was introducedwith options of vernacular languages. Also for the first time in the industry asingle number was launched for refill bookings and requests for new connections throughmissed calls.

During the year Indane XtraTej differentiated LPG withnano-additives for enhanced performance was launched. The 5-kg cylinder rebranded as Chhotuwas a big fillip to brand Indane. In addition Indane composite cylinders werelaunched in 5 kg and 10 kg units to offer a new-age and lightweight LPG cylinder tocustomers.

SERVO the lubricant brand of the Company improved its marketshare and retained its numero uno position registering a growth of 26% over the previousyear with a sale of 561 TMT. SERVO expanded its footprint to Fiji and Turkey taking theSuperbrand's presence to 32 countries. Approvals for

38 SERVO grades were obtained from Original Equipment Manufacturers(OEMs) like Tata Motors Mahindra & Mahindra KIA Motors Nissan Ashok LeylandHonda etc. In view of future demand as well as for manufacturing futuristic lubeformulations for enhancing performance your Company is setting up the world'ssecond largest integrated ultramodern state-of-the-art lube complex of 450 TMTPAcapacity with the largest product portfolio at Chennai with an investment of about Rs1400 Crore.

In the aviation sector too the Company maintained its leadershipposition with a market share of 62.9% during the year. Two new Aviation Fuel Stations(AFS) were commissioned at Darbhanga (Bihar) and Bilaspur (Chhattisgarh) during the yeartaking the total number of AFS set up in the country by the Company to 121. Standing bythe country in testing times the Company refuelled flights under the Vande Bharat Missionand also refuelled the rescue operations spearheaded by the Defence Forces during theUttarakhand Glacier Burst.

The cryogenics group of the Company maintained its leadership and soldover 30000 units of cryo-cans during the year. The cryogenics group also manufactured 19refuellers 10 aviation containerised tanks with modules and two customised heavy dutyrefuellers. In line with the country's requirement the cryogenics group undertookmanufacturing of 20 LOx tankers to be supplied in the current year. To meet theincreasing requirement of cryo products including LNG and LOx equipment in the countrythe Company is planning to expand its manufacturing facilities in and around the existingplant at Nashik.

To improve supply infrastructure for supporting increasing demand yourCompany has established a modernised lube blending plant at Trombay Maharashtra and newLPG bottling plants at Nagpur (Maharashtra) Jabalpur (Madhya Pradesh) and Korba(Chhattisgarh). Construction of an exclusive jetty at Kamarajar Port near Chennai at acost of Rs 921 Crore for import and export for LPG and POL products is also underway.

In a first of its kind campaign Customers Day was celebrated onJanuary 9 2021 across the network of retail outlets LPG distributorships SERVOstockists AFSs and other supply locations. The widely followed event brought togethercustomers channel partners and their families and trended as one of the top grossingevents.

Research and Development

IndianOil's Team R&D exhibited exemplary resilience incontinuing the pursuit of development and commercialisation of indigenous technologies.The Centre pursued cutting-edge research programmes in core petroleum activities likelubricant refining petrochemicals differentiated fuels high efficiency lubricants andpipeline transportation technology among others. In addition the R&D Centre alsofocussed on research activities in sunrise areas like alternative energy segments likebio-energy solar energy hydrogen economy energy storage nanotechnology carbon captureand utilisation and battery technologies etc.

During the year these R&D pursuits resulted in the filing of 169patents (69 in India and 100 overseas) taking the total tally of filed patents till March31 2021 to 1294. A hundred and eighty patents were granted taking the Company'sportfolio of effective patents to 1165 as on March 31 2021.

The R&D Centre sustained its efforts in the field of lubricants toachieve self-sufficiency with the Government of India's intent of an‘Aatmanirbhar Bharat' with the issuance of 106 formulations and 47 approvalsfrom Original Equipment Manufacturers (OEM) and customers. The INDMAX technology wasselected for a 1.9 MMTPA Petro FCC unit by Numaligarh Refinery Limited the first successoutside the Company's own refineries in the domestic refining sector.

Your Company successfully commissioned the 1.2 MMTPA grassrootsIndeDiesel unit at Haldia Refinery producing on-spec BS-VI diesel. Propylenemaximisation study was carried out for the RFCCU at Haldia Refinery for improvementof propylene yield with change of catalyst and optimisation of process conditions.

The R&D Centre's indigenous Octamax technology enabledthe production and launch of XP100 a niche high octane petrol. A corrosion inhibitordeveloped by the Centre was accepted for all product and offshore crude pipelines.

In a boost towards green energy your Company undertook a successful trialrun of 50 buses on HCNG fuel technology. To reduce import dependency development of anovel 2G Enzyme was undertaken for the production of 2G ethanol fromlignocellulosic biomass. A demonstration plant of 10 Tonnes Per Day is under constructionat Panipat to showcase this technology. A facility was created at Palwal Haryana fordeveloping the off-site pre-treatment technology of paddy straw biomass. To support theGovernment of India's ‘Waste to Value' initiative your Company developedand successfully demonstrated the eco-friendly Plastic to Fuel (IndEcoP2F) technologyfor the conversion of waste plastic at the Digboi Refinery with 95.4 wt% plastic to fuelconversion.

Business Development

Beyond its core business the Company also integrated and diversifiedinto new business segments through steady and timely investments. Its expanded portfolioof petrochemicals natural gas exploration and production and alternative energy standsout as its key strength to take on the changes triggered by the ongoing energytransition.

Petrochemicals

The Company is the second largest petrochemicals player in thecountry offering polymers Linear Alkyl Benzene (LAB) Purified Terephthalic Acid (PTA)glycols and butadiene. The brand PROPEL is a leading brand in the Indianpetrochemicals market.

The petrochemicals business of the Company demonstrated exemplaryperformance in the face of tough times and uncertainties during the year. The conditionswere exacting for the domestic as well as global petrochemical industry due to sharpvolatility in demand and feedstock prices. Certain unexpected events like hurricanes andpolar storm in the US and worldwide container shortages further impacted the supplychain which impacted global trade.

Amid this volatile business environment the petrochemicals businesscontinued to perform exceptionally delivering a 159% growth in profit vis--vis lastyear. During the year sales including exports was 2.68 MMT as against 2.22 MMT in theprevious year registering a growth of 20% which was backed by higher demand mainly frompackaging FMCG consumer goods safety equipment health and sanitation sectors. Withinthe bouquet of petrochemicals polymer sales touched a record high of 1.65 MMTregistering a growth of 28% over the previous year.

A new Product Applications and Development Centre (PADC) was setup at Paradip (Odisha) during the year to cater to the product application and testingneeds of the industry as well as to support the entrepreneurial activities in the region.The Company continued to expand its grade basket in polymers and launched four new polymergrades. These developments are in line with the Government of India's‘Aatmanirbhar Bharat' campaign along with maintaining the Company'scompetitive advantage in the petrochemicals business. In addition 21 OEM approvals werereceived from major Indian and international brands for different polymer grades.

Medical sector centric efforts were one of the core areas of focus thisyear. The polymer grade 1200-MC was extensively used in medical devices and disposablesyringes thereby lending support in the fight against the Covid-19 pandemic. A new nichegrade 1350YH was also introduced to address the emerging requirement in personal hygieneproducts such as face masks sanitary-pads and diapers.

During the year a ‘Share Subscription-cum-Shareholders Agreement& Memorandum of Understanding' was signed with the Odisha IndustrialInfrastructure Development CorporationStateGovernmentofOdishaforthedevelopmentoftheParadip Plastic Park. The plastic park willhelp in the development of downstream plastic industries auxiliary industries and MSMEsin Odisha generating new employment opportunities in the state and region.

The Paradip port continued to gain prominence as an export destinationof the country with regular exports to nearby South and South East Asian countriescommencing from the nearby Paradip Polypropylene Plant of the Company.

TheeffortsoftheCompanyweredulyrecognisedbytheindustry and for itsexemplary performance in the petrochemicals sector during the year your Company wasawarded the prestigious ‘FICCI Chemicals and Petrochemicals Awards 2021'in two categories—namely the ‘Company of the year in Petrochemicals (PublicSector)' and ‘Best Contribution to Academia'.

Natural Gas

The Company continued to expand its natural gas business during theyear and clocked sales (including internal consumption) of 5.38 MMT as against 5.42 MMT in2019-20. The Company now has a customer base of 70 R-LNG patrons with the addition of ninenew customers during the year besides supplies to its own refineries at Mathura (UttarPradesh) Panipat (Haryana) and Koyali (Gujarat). Sale through the Company's ‘LNGat the Doorstep' initiative grew by 25% during the year to reach a level of104.25 TMT. During the year 33 LNG cargoes were imported of which 23 were spot cargoeswhile 10 were against long-term contracts.

City Gas Distribution (CGD)

Your Company is swiftly expanding its presence in the CGD business.Along with its two joint venture companies Green Gas Limited (with GAIL India Limited)and IndianOil Adani Gas Private Limited (with Adani Total Gas Limited) it hasauthorisation for 40 Geographical Areas (GAs) spread across the length and breadth of thecountry. During the year the Company commissioned its first standalone GA in Rewa (MadhyaPradesh) while eight GAs were commissioned by the Company's joint ventures. Withthis 22 of the 40 GAs under the Company's fold are now operational. During the year0.68 Lakhs PNG connections were released across all GAs either by the Company directly orthrough its joint venture companies. On its own your Company commissioned 12 CNG stationsduring the year and commenced registration and on-boarding of domestic PNG customers invarious GAs through its in-house portal. In 2021-22 apart from achieving the stipulatedMinimum Work Progress (MWP) targets gas-in is planned for the GAs at Aurangabad(Maharashtra) Bokaro (Jharkhand) Ashoknagar (Madhya Pradesh) and Arwal (Bihar).

Exploration & Production (E&P)

The Company continues to explore opportunities in the E&P spherethrough participating interests (PI) joint ventures and wholly-owned subsidiaries. Theupstream portfolio consists of nine domestic and 11 overseas assets which are in variousstages viz. eight producing four under development four blocks with discovery oneunder appraisal and three under exploration.

During the year the share of production from the producing assets was3.86 MMT of oil equivalent (MMtoe). Production from the assets stood lower than 4.26 MMtoeregistered in the previous year as OPEC+ cuts and heavy inventory levels affectedproduction in overseas blocks.

During the year oil flow was established in the appraisal well drilledin the Company's Onshore Block 1 in Abu Dhabi. The Company has 50% participatinginterest in the asset which is also its first overseas block with IndianOil as operator.

The Company's Block AAP-ON-94/1 in Dirok Field in Assam recordedthe highest ever daily production of natural gas as on August 5 2020 which was doublethe Field Development Plan approved at the production level.

Alternative Energy

Your Company is steadily progressing towards harnessing renewableenergy to minimise carbon emissions for a green economy. The Company has an installedcapacity of 232.95 MW of renewable energy comprising 167.6-MW wind power capacity and65.35-MW solar energy capacity as on March 31 2021. These projects generated329.45 GWh during the year resulting in emission mitigation of 2.6 Lakhs Metric

Tonnes of carbon dioxide equivalent (‘00000 MTCo2-eq).

During the year the company solarised 1658 retail outlets (ROs). As on31.03.2021 18336 of IndianOil's ROs were powered by solar power systems withcumulatative installed capacity of 102.4 MW. Upscaling initiatives are in hand for meetingthe increasing grid power demand of refineries due to future expansion plans.

Committed to enhance its green footprint your Company is takingstrides to contributing towards better air quality by reducing crop burning and loweringvehicular emissions by higher ethanol blending rate (a green and clean fuel). In thisregard the Company is putting up a second-generation ethanol plant at Panipat and abiofuel complex including CBG plant at Gorakhpur (Uttar Pradesh). The Company alsoestablished two ‘cattle dung to biogas' plants in Madhya Pradesh and UttarPradesh while another is being implemented in Rajasthan.

Your Company is the first and only Oil and Gas Company sellingCBG through 23 ROs across eight states under the ‘IndiGreen' brand. TheCompany has issued a Letter of Intent to over 1500 plants for production and supply ofapproximately 3.5 MMTPA of CBG under the Sustainable Alternative Towards AffordableTransportation (SATAT) scheme of the Government of India.

Going further on the path towards alternative energy your Company hastied up with 22 plants through EOIs for supplying biodiesel produced from Used Cooking Oil(UCO) with an annual capacity of 229 TKL. On May 4 2020 the first truck load ofUCO-based biodiesel blended HSD was flagged off by the Hon'ble Minister of PNGand Steel from the Tirkri Kalan Terminal in West Delhi.

The Company is taking initiatives in a variety of ‘waste toenergy' options and has signed an MoU with the North Delhi Municipal Corporationon January 19 2021 in this regard. Recently your Company has signed an MoU with theNTPC and the South Delhi Municipal Corporation (SDMC) for setting up 50 TPD ‘waste toenergy' demo projects at SDMC's Okhla landfill site.

To support the Government of India's e-mobility initiative yourCompany acquired equity stake in Phinergy Limited (an Israeli company specialised inAluminium-Air Battery technology) and formed a joint venture namely ‘IOC PhinergyPrivate Limited' (IOP) in February 2021 to commercialise the Aluminium-Air Batterytechnology in India. Your Company is also exploring the prospects of green hydrogenand is working towards exploring possible collaboration in the area of ‘waste tohydrogen' technology. Discussions are also ongoing with an electrolyser technologycompany towards utilisation of electricity generated from renewable energy plants toproduce green hydrogen.

Sustainable Development

As a responsible entity your Company has taken a number ofsustainability initiatives across its locations related to energy conservation energyefficiency renewable energy and carbon sequestration water management through reducingconsumption recycling and rainwater harvesting and waste management through reducingreusing and recycling initiatives.

Across the companyrainwater harvesting systems have been installedwith catchment area covering more than 2500 Ha and harvesting more than 8 Billion litersof rain water in 2020-21. The increase in rain water harvested during the year isan account of inclusion of the watershed projects implemented in the refineries. TheCompany launched a unique initiative #TreeCheers in November 2020 under whichthe Company planted saplings on behalf of patrons who refuelled their new vehicles at theCompany's outlets. A total of 2.26 Lakhs saplings were planted across the countryduring the five-day campaign period making it one of the biggest success stories inrecent times.

The Company is replacing all conventional lights with LED across itsinstallations. During the year around 1.12 Lakhs LED lights installed with cumulativereplacement count of 7.19 Lakhs of LED lights. Paper recycling is another focus area forthe company. During the year 291 Tonnes of waste paper were recycled through designatedrecyclers. The Company is also developing a supply chain for plastic recycling with avision towards plastic neutrality. An MoU was signed with a technology provider forexploring various technological options such as plastic waste recycling and upcyclingwaste-to-chemicals production anaerobic digestion of organic waste etc.

Overseas Business

Your Company's approach to overseas business is underpinned by afour-pronged strategy which includes investment in overseas projects and assets openingof branch/ representative offices export of products and export of services. To expandits footprint in neighbouring countries its subsidiary company IOC Middle East FZEformed a new joint venture company in Bangladesh for conducting LPG business and forexploring other business opportunities in the hydrocarbon sector in Bangladesh. Recentlythe Company opened new branch/ representative offices in Myanmar Bangladesh and Nepal todevelop businesses in the downstream hydrocarbon sector in these countries.

MoUs were signed during the year with established international playersof Bangladesh Vietnam and Nepal for mutual cooperation across the entire hydrocarbonvalue chain including oil and gas E&P refining transportation setting upplants/terminals supply and retailing collaboration for R&D activities providingconsultancy capacity building and secondment services etc.

During the year export of finished petroleum products was given a bigpush with your Company reaching out for supplying petroleum products to neighbouringcountries. Your Company expanded its reach to global markets and exported

5394 TMT of petroleum products to various countries viz. BangladeshMauritius Sri Lanka etc. In addition 60 TMT of petrochemical products were exportedduring the year. In another breakthrough an export contract was finalised for exportingHSD via land to Myanmar for constructing a two-lane road from Kaletwa to Zorinpui alongthe India–Myanmar Border in the Chin State of Myanmar under the ‘KaladanMultiModal Transit Transport' project.

An India Energy Office was set up in Russia by a consortium of fiveIndian PSUs including your Company. The office was opened with the objective of promotingthe interest of Indian Oil Companies in Russia to support current E&P assets explorenew business opportunities tie-up for new technologies and the import-export of petroleumproducts and services.

The Company has been providing consultancy services/ capabilitybuilding services/ secondment services in the Gulf Cooperation Council (GCC) region SouthEast Asia and East Africa.

Explosives

The explosives group achieved an all-time high production and sales of265.5 TMT of bulk explosives during the year registering a growth of 29% over theprevious year's volume of 205 TMT.

Diversification

Your Company has ventured into setting up fertiliser plants at Barauni(Bihar) Gorakhpur (UP) and Sindri (Jharkhand) through a joint venture company HindustanUrvarak and Rasayan Limited (HURL) in partnership with National Thermal Power CorporationLimited Coal India Limited Fertilizer Corporation of India Limited and HindustanFertilizer Corporation Limited. The plants are under advanced stages of construction andslated to be commissioned by the fourth quarter of this fiscal with commercial productionexpected to start by April 2022.

International Trade

Your Company imported 53.60 MMT of crude oil during the year asagainst 59.75 MMT in the previous year to meet the crude oil requirement for processing atits refineries. The import was lower than the previous year due to drop in demand forpetroleum products caused by the Covid-19 pandemic. The selection of crude oil isundertaken from a diversified mix of supply sources to optimise the cost as well as toimprove flexibility. The import of petroleum products during the year was 8.58 MMT asagainst 8.57 MMT in the previous year. Various strategies such as increasing offshorestorage of crude and sale to strategic reserves were deployed during the year to copewith the sudden drop in demand.

Projects

Your Company believes that creation of infrastructure is important tomake petroleum products available to customers at the least cost. Therefore the Companycontinued to invest in greenfield and brownfield projects. During the year the totalcapex spent by the Company was J 28684 Crore (including Rs 24051 Crore onits capital projects and the rest towards equity investment in its joint ventures/subsidiaries). The development of infrastructure was financed through an optimum mix ofinternal accruals and borrowings from domestic as well as international markets.

Your Company is executing a basket of projects ranging from refineryexpansions and augmentation of pipeline network to diversification through joint ventures.The major projects are focussed on expansion of refineries fuel quality upgradationrevamp and expansion of petrochemical plants petrochemical and lube integration as wellas grassroot projects for strengthening the hydrocarbon value chain.

Your Company is committed towards the expansion of its pipeline networkand is executing pipeline projects to take the length to 21000 Km by the end of thisfiscal. Major ongoing pipeline projects include the Haldia–Barauni crude oilpipeline the Paradip–Hyderabad product pipeline augmentation of theParadip–Haldia–Durgapur LPG pipeline and its extension up to Patna andMuzaffarpur the Koyali–Ahmednagar–Solapur product pipeline theParadip–Somnathpur–Haldia product pipeline augmentation of theSalaya–Mathura crude oil pipeline system and theEnnore–Thiruvallur–Bengaluru–Puducherry–Nagapattinam–Madurai–Tuticorinnatural gas pipeline. In addition your Company is undertaking massive LPG and natural gaspipeline projects through joint ventures spanning approximately 9300 Km. These includethe Kandla–Gorakhpur LPG pipeline (the longest LPG pipeline in the world) through IHBLimited and the North East Natural Gas Grid through Indradhanush Gas Grid Limited (IGGL).

Your Company is also establishing a new R&D campus at FaridabadHaryana with state-of-the-art facilities at a cost of Rs 3200 Crore to boost theresearch horizon of the R&D Centre which has evolved into a world-class technologysolutions provider.

Health Safety & Environment (HS&E)

The Company believes that good HS&E performance is an integral partof efficient and profitable business management and therefore is committed to conductits business with a strong environment conscience ensuring sustainable development safeworkplaces and enrichment of the quality of life of its employees customers andcommunity. All refineries of the Company are certified to ISO:14064 standards forsustainable development as well as for the Occupational Health and Safety ManagementSystem (OHSAS-18001/ ISO:45001) besides having fully equipped occupational healthcentres.

Most of the pipeline installations and some of the marketinginstallations of the Company are also ISO-14001 certified. The API 1173 based PipelineSafety Management System was introduced across the entire pipeline network. Compliancewith safety systems and procedures as well as environmental laws is monitored at the unitdivision and corporate levels.

The HS&E activities of the Company are reviewed periodically in theBoard meetings. During the year various capability building and training programmes wereconducted on safety-related topics covering the entire spectrum of activities of theCompany.

Your Company undertook various administrative controls such asimplementation of thermal screening at entry points practice of proper hygiene/sanitationmeasures physical distancing staggered office timings allowing work from home foridentified employees etc. to safeguard its workforce from Covid-19 infections. An onlinedashboard was developed for real-time monitoring of the health status of employees andtheir families with a telemedicine application for online medical consultation too.

During the year various capability building and training programmeswere conducted on safety-related topics such as all India campaigns for safe decantationof TT and safe TT driving campaigns among others. Awareness among LPG domestic customerson safe use of LPG was also generated through Safety Clinics and LPG Panchayats as well asthrough social media interactions.

Your Company was bestowed with the National Safety Council Award 2020with the Guwahati Refinery winning the

Sarvashreshtha Suraksha Puraskar.

DIGITAL INITIATIVES

Your Company marked 2020 as the ‘Year of Digitalisation'and aptly transformed processes to best-in-class and deployed various digital tools tofurther optimise operational performance and effectiveness. Implementation of customerrelationship management and secondary dealer management system across LPG lubes anddirect customers business lines was a necessary IT intervention in serving over 25 Croreof our esteemed customers. The Digitally Advanced Company of the Year 2020 awardfrom FIPI was a fructification and recognition of these initiatives.

The digital transformation project i-DRIVE made significantstrides in 2020-21 and scripted notable successes to accelerate the pace of our digitalinterventions in the times ahead. Some of these initiatives include the Digital Centre ofExcellence (DCoE) for an analytics hub which operationalised more than 25 AI/ ML-basedadvanced analytics use-cases such as yield maximisation of units in our refineriesoptimum

cleaning schedule for heat exchanger trains a decision support systemfor LPG cylinder supply forecasting PetChem inventory optimisation customer churnanalysis for industrial customers predictive maintenance and remote monitoring ofcritical equipment like gas turbines etc.

Implementation of emerging tech platforms increased efficiency throughdigital assistants/ chatbots robotic process automation (RPA) business intelligence (BI)dashboarding self-service platforms pan-IndianOil data management platform (DMP) theData Lake with IT-OT convergence set the foundational platform for all data-drivendecision making.

Implementation of off-the-shelf solutions viz. the datareconciliation and yield accounting tool (DRYA) shutdown management system integratedshipping tool end-to-end project management suite multi-BU pricing tool networkplanning tool coastal scheduler and the Geographic Information System (GIS) acted asenablers for enhancing process efficiency.

Human Resources

The strong dedicated and resilient workforce of 31648 IOCianscontinued to perform their duties despite challenges posed by Covid-19 to fuel thecountry. The total number of employees as on March 31 2021 include 17762 executives and13886 non-executives and 2775 women employees comprising 8.77% of the total workforce.During the year the Company recruited 371 executives. To further the cause ofapprenticeship training in the country the Company engaged apprentices under variouscategories like Trade/ Technician/ Fresher/ skill-certificate holder. The apprentices wereimparted practical inputs with a structured monitoring and assessment methodology.

The Company scrupulously follows the Presidential Directives andguidelines issued by the Government of India regarding the reservation in services for SC/ ST / OBC / PwBD (Persons with Benchmark Disabilities) / Ex-servicemen / EconomicallyWeaker Sections (EWSs) to promote inclusive growth. Rosters are maintained as per thedirectives and are regularly inspected by the Liaison Officer(s) of the Company as well asthe Liaison Officer of the Government of India to ensure proper compliance. Grievance /Complaint Registers are also maintained at Division / Region / Unit levels for registeringgrievances from OBC / SC / ST employees and efforts are made to promptly dispose of therepresentations/grievances received. In accordance with the Presidential Directive thedetails of representation of SC / ST / OBC in the prescribed format are attached as Annexure– I to this Report.

The provisions of 4% reservation for persons with disabilities in linewith the Government of India's guidelines/ instructions were implemented by theCompany. Necessary concessions/ relaxations in accordance with the rules in this regardwere extended to physically challenged persons in recruitment. The number of differentlyabled employees as on March 31 2021 was 707 constituting 2.23% of the total employeestrength.

During the year cordial industrial relations were maintained acrossthe Company. The Company provides comprehensive welfare facilities to its employees totake care of their health efficiency economic betterment etc. and to enable them togive their best at the workplace. The Company supports participative culture in themanagement of the enterprise and has adopted a consultative approach with collectivesestablishing a harmonious relationship for industrial peace thereby leading to higherproductivity.

The Company believes in holistic and meaningful employee engagement;and their development to catalyse the emergence of the highest potential of employees. Toalign HR activities with the Corporate Vision and the newly launched Talent Vision manyinitiatives were taken during the year. The ‘People first' approach of theCompany is focused at the well-being of teams and stakeholders.

During the year a Talent Vision and Strategy Framework for three yearswas launched. Your Company's vision was to ‘Align our People and TalentCapability to deliver our Energy Promise to the Nation'. Along with its core valuesthe Company will be driven by a DARE2 framework which emphasises ‘DexterityAdaptability Resilience Engagement and Empathy'.

The Company achieved Level 3 under the People Capability MaturityModel (PCMM) which is a proven set of Human Capital Management practices that providea roadmap for continuously improving the capability of workforce. The employees of theCompany have been provided access to the Bersin–Research and Sensing Portal astate-of-the-art knowledge platform which will keep readers informed of the latestdevelopments. The wholehearted adoption of e-learning portal Swadhyaya by employeesduring the pandemic emerged as a successful engagement-cum-development practice. In allemployees completed more than 1 Million e-modules. A new mentoring framework wasinstitutionalised to provide opportunity for all employees to help one another growthrough collaboration goal achievement and psycho-social support.

As a forward looking responsible corporate your Company has alwaysstrived to establish an inclusive work culture which ensures providing a secure workenvironment to its women employees and has initiated many measures to facilitate the same.

Particulars of Employees

The provisions of Section 134(3)(e) of the Act are not applicable to aGovernment Company. Consequently details on Company's policy on Directors'appointment and other matters as required under Section 178 (3) of the Act are notprovided.

Similarly Section 197 of the Act is also exempt for a GovernmentCompany. Consequently there is no requirement of disclosure of the ratio of theremuneration of each Director to the median employee's remuneration and other suchdetails including the statement showing the names and other particulars of every employeeof the Company who if employed throughout / part of the financial year was in receipt ofremuneration in excess of the limits set out in the rules are not provided in terms of

Section 197 (12) of the Act read with Rule 5 (1) / (2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

Hindi Implementation

The Company is committed to implementing Hindi into the day-to-dayfunctioning at its various offices/ locations/ units. The provisions of the OfficialLanguage Act 1963 and rules notified thereunder were complied with. The communicationsreceived in Hindi including any application appeal or representation written or signed byan employee in Hindi is replied to in Hindi. Official Language Implementation Committees(OLIC) have been formed in all offices/units to review the progress of implementation ofofficial language policies.

Corporate Social Responsibility

Your Company's CSR objectives are enshrined in its Vision /Mission statement ‘…to help enrich the quality of life of the community andpreserve ecological balance and heritage through a strong environment conscience...'.CSR thrust areas include ‘safe drinking water and protection of waterresources' ‘healthcare and sanitation' ‘education andemployment-enhancing vocational skills' ‘rural development'‘environment sustainability' ‘empowerment of women and socially /economically backward groups' etc. undertaken mainly for improving the quality oflife in various communities including marginalised and under privileged sections of thesociety. The Company has partnered many life-changing community development projects andhas positively impacted stakeholders with around 600 projects across the length andbreadth of the country.

During the year the Company also undertook various CSR initiatives toovercome the challenges posed by the Covid-19 pandemic like insurance coverage foremployees of business partners providing medical equipment to hospitals procurement ofcold chain equipment for transportation of vaccines contributions to the PM Cares Fundetc. During the year as against the CSR budget of Rs 342 Crore (being 2% of the averageprofit of the previous three years as per the provisions of the Companies Act 2013) theCompany set aside an enhanced budget of Rs 460.37 Crore to ensure continuity in theplanned CSR activities including many flagship projects. The entire budget of Rs 460.37Crore was spent during the year on various CSR activities. A report on the Company'sCSR activities as per the provisions of the Companies Act along with CSR highlights forthe year is attached as Annexure – II to the Report. The composition of theCSR Committee is provided in the Corporate Governance Report. The CSR policy of theCompany can be accessed on the Company website: https://www.iocl.com/download/Policies/IOC_S&CSR_Policy.pdf.

Right to Information Act (RTI)

The Company has put in place an elaborate mechanism to deal withmatters relating to the RTI as required under the Right to Information Act 2005. Detailedinformation is hosted and regularly updated on the official website of the Companywww.iocl.com which inter-alia includes details of Central Public Information Officers(CPIOs) / Assistant Public Information Officers (APIOs) third-party audited reports onmandatory disclosures etc.

The Company has designated a Nodal Officer at its Corporate Office NewDelhi. In addition 30 First Appellate Authorities 41 CPIOs and 41 APIOs have beendesignated across various locations. The Company has aligned with the Online RTI Portal ofDoPT Government of India and all applications / appeals received through the portal arehandled through the portal itself. The quarterly / annual reports are submitted withinthe prescribed timeline on the website of Central Information Commission www.cic.gov.in.

During the year 4813 requests and 578 first appeals were received anddisposed-off within the prescribed timelines. In addition 90 second appeals were filedbefore the Central Information Commission New Delhi and all were handled without anypenalty/disciplinary action by the Hon'ble Commission.

Compliance with the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013

The provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 have been implemented across theCompany with the clear objective of providing protection to women against sexualharassment at the workplace and redressal of complaints of sexual harassment. Internalcommittees have been set up at each Unit / Region / Head Office level headed bysenior-level women employee to deal with sexual harassment complaints.

Six complaints of sexual harassment were pending as on April 1 2020.During the year four complaints were received and eight complaints were handled. As onMarch 31 2021 two complaints were pending.

Regular workshops were organised especially for women employees tobring awareness about their rights and facilities at the workplace and emphasising theprovisions of the Act. During the year 35 workshops/awareness programmes were conducted.Gender sensitisation programmes and sensitising male employees were also conductedregularly.

Vigilance

The objective of the vigilance function is to ensure maintenance of thehighest level of integrity in the Company. The Company has a separate VigilanceDepartment which is headed by the Chief Vigilance Officer. The department acts as a linkbetween the Company and Chief Vigilance Commissioner and also advises the Company on allmatters pertaining to the subject. The vigilance department takes preventive punitive andparticipative measures with emphasis on the preventive and participative aspects andalso helps in establishing effective internal control systems and procedures forminimising systemic failures. During the year 62 vigilance awareness programmes wereconducted which were attended by about2400employees.DisciplinaryactionunderapplicableConduct Discipline and Appeal Rules1980 and Certified Standing Orders were taken by the Company for irregularities/lapses.During the year 44 disciplinary matters related to vigilance cases were disposed of and16 such cases were pending at the end of year. The cases pertain to irregularities such asindiscipline dishonesty negligence in performance of duty or neglect of work etc. TheCompany continuously endeavours to ensure fair and transparent transactions throughtechnology interventions and system/process review in consultation with the CentralVigilance Commission and internal vigilance setup. The Vigilance Department (Corporate) ofthe Company was awarded ISO certification during the year.

Public Deposit Scheme

The Public Deposit Scheme of the Company was closed with effect fromAugust 31 2009. The Company has not invited any deposits from the public during the yearand no deposits were outstanding as on March 31 2021 except the old cases amounting toRs 55000 which remain unpaid due to unsettled legal/court cases.

Corporate Governance

Your Company always endeavours to adhere to the highest standards ofcorporate governance which are within the control of the Company. A comprehensive Reporton Corporate Governance inter-alia highlighting the endeavours of the Company in ensuringtransparency integrity and accountability in its functioning has been incorporated as aseparate section forming a part of the Annual Report. The certificate issued by theStatutory Auditors on Compliance with Corporate Governance guidelines is annexed to theReport on Corporate Governance.

Management's Discussion & Analysis Report

The Management's Discussion and Analysis (MDA) Report as requiredunder Corporate Governance guidelines has also been incorporated as a separate sectionforming a part of the Annual Report.

Business Responsibility Report

The Business Responsibility Report providing information on thevarious initiatives taken with respect to environmental social and governanceperspectives has been prepared in accordance with the directives of SEBI and is hosted onthe website of the Company on the link https://www.iocl.com/business-responsibility-report

Audit Committee

The Audit Committee of the Board comprised three members as on March31 2021 of whom two were Independent Directors (including the Chairman) and onenon-executive Director. The observations / recommendations made by the Audit Committeeduring the year were put up to the Board and the same were accepted by the Board. Otherdetails of the Audit Committee such as its composition terms of reference meetingsheld etc. are provided in the Corporate Governance Report.

Other Board Committees

The details of other Board Committees their composition and meetingsare also provided in the Corporate Governance Report.

Code of Conduct

The Board of the Company has enunciated a Code of Conduct for theDirectors and Senior Management Personnel which was circulated to all concerned and wasalso hosted on the Company's website. The Directors and Senior Management Personnelhave affirmed compliance with the code of conduct for the financial year 2020-21.

Risk Management

The Company considers risk management as a key element of its businessoperations and has put in place effective systems to identify analyse monitor andmitigate risks to ensure the organisation's sustained growth and profitability.

The Company's Enterprise Risk Management involves riskidentification assessment and categorisation (based on risk appetite) and is reviewedregularly by risk-owners to optimise risks with appropriate mitigation plan. A RiskManagement Compliance Board comprising senior management personnel and headed by ChiefRisk Officer reviews the various risks associated with the Company's business. TheCompany has constituted a Risk Management Committee comprising Whole-time Directorswhich oversees the risk management activities. A report was thereafter put up to theAudit Committee and the Board.

Over and above the various business risks which are apprehended andanalysed in the regular course of business the Company encountered a totallyunprecedented risk to its business posed by the Covid-19 pandemic. However your Companydemonstrated strong resilience in the face of adversity during the pandemic despite demanddestruction and declining product cracks. The risks posed by Covid-19 were closelymonitored by the top management of the Company on a regular basis to ensure continuity ofbusiness operations in an optimised and safe manner.

Internal Financial Controls

The Company put in place adequate internal financial controls forensuring efficient conduct of its business in adherence with laid-down policies;safeguarding of its assets; prevention and detection of frauds and errors; accuracy andcompleteness of the accounting records; and timely preparation of reliable financialinformation which is commensurate with the operations of the Company.

The Company also has a separate Internal Audit department headed by anExecutive Director who reports to the Chairman. The Internal Audit department has a mixof officials from finance and technical functions who carry out extensive auditthroughout the year. The statutory auditors are also required to issue the IndependentAuditor's Report on the Internal Financial Controls over financial reporting of theCompany under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act 2013. Thereport issued thereupon has been attached along with the Standalone and ConsolidatedFinancial Statements respectively.

The Board believes that systems in place provide a reasonable assurancethat the Company's internal financial controls are designed effectively and areoperating as intended.

Statutory Auditors

The Office of the Comptroller & Auditor General of India hadappointed the Statutory Auditors for the financial year 2020-21. The Auditors hadconfirmed that they are not disqualified from being appointed as Auditors of the Company.The Notes on the financial statement referred to in the Auditors' Report areself-explanatory. The Auditors' Report does not contain any qualification or adverseremark.

The Auditors' remuneration for the year was fixed at Rs 200 Lakhsplus applicable taxes for Statutory Audit. In addition reasonable out-of-pocket expensesincurred are also reimbursed at actuals. The total amount payable to the StatutoryAuditors for all services rendered to the Company during 2020-21 was Rs 402 Lakhs.

Cost Audit

The Company maintains cost records as required under the provisions ofthe Companies Act. The Company had appointed Cost Auditors for conducting the audit of thecost records maintained by its refineries lube blending plants and other units for2020-21. A remuneration of Rs 20.20 Lakhs and applicable taxes was fixed by the Board forpayment to the cost auditors for 2020-21 which was ratified by the shareholders in thelast AGM. The cost audit reports are filed by the Central Cost Auditor with the CentralGovernment in the prescribed form within the stipulated time.

Secretarial Audit

The Board had appointed M/s. Ragini Chokshi & Co. PractisingCompany Secretaries to conduct the Secretarial Audit for 2020-21. The Secretarial Auditorin their report have stated that during the period under review the Company has compliedwith the provisions of the Act Rules Regulations Guidelines Standards etc. except asunder:

The Company could not comply with the requirement of having not lessthan 50% of the Board of Directors as Non-Executive Directors for the period September 222020 to March 31 2021.

The Company could not comply with the requirement of having at leasthalf of the Board of Directors as Independent Directors during 2020-21.

The Company could not comply with Regulation 17(10) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI (LODR)) whichrequires performance evaluation of Independent Directors by the entire Board of Directorsand regulation 25(4) of the SEBI (LODR) which requires review of performance of NonIndependent Directors the Board of Directors as a whole and the Chairperson of theCompany by the Independent Directors.

In this regard it clarified that the Company being a GovernmentCompany under the administrative control of the Ministry of Petroleum & Natural Gasthe selection and appointment of Directors (including Independent Directors and WomenDirectors) vests with the Government of India as per Government guidelines. Further theMinistry of Corporate Affairs vide notification dated June 5 2015 has providedexemption to Government Companies regarding the provisions related to evaluation ofperformance of Directors under the Companies Act 2013 as the evaluation is carried outby the administrative ministry.

The Secretarial Audit report issued by M/s. Ragini Chokshi

& Co. Practising Company Secretaries is attached as Annexure -III to this report.

Reporting of Frauds by Auditors

The Auditors in their report for the year have not reported anyinstance of fraud committed by the officers/employees of the Company.

Public Procurement Policy for Micro and Small Enterprises (MSEs) Order2012

In line with the Public Procurement Policy of the Government of Indiaas amended the Company is required to procure minimum 25% of the total procurement ofGoods and Services from MSEs out of which 4% is earmarked for procurement from MSEs ownedby SC/ ST entrepreneurs and 3% from MSEs owned by women. The procurement from MSEs(excluding crude oil petroleum products and natural gas API line pipes and certainproprietary items) during 2020-21 was as under:

PARAMETERS TARGETS ACTUAL
Total Procurement from MSEs 25% 28.36%
(General Reserved SC/ST &Women)
Procurement from Reserved 4% 0.75%
SC/ST MSEs (Sub-target out of 25%)
Procurement from Women- 3% 0.14%
owned MSEs (Sub-target out of 25%)

The deficit of 3.25% and 2.86% under the sub-targets was due tonon-availability of vendors in the sub-category; however the overall target was achievedby procurement from other micro and small enterprises in line with the policy.

Several initiatives were undertaken to identify the entrepreneurs forprocurement of goods and services from MSEs owned by SC/ST enterprises including 76vendor development programmes.

Subsidiaries Joint Ventures & Associates

During the financial year two new joint venture companies wereincorporated as per details given below:

IndianOil Total Private Limited incorporated on October 7 2020 with50:50 equity holding between your Company and Total Marketing and Services S.A. Francefor undertaking Bitumen and LPG business.

IOC Phinergy Private Limited incorporated on February 19 2021with 50:50 equity holding between your Company and Phinergy Israel for commercialisationof Aluminium-Air Battery technology in India.

In March 2021 your Company exited from an inoperative joint ventureIndianOil Panipat Power Consortium Limited (IPPCL) through sale of its entire equityshareholding.

As required under the provisions of the Companies Act 2013 astatement on the performance and financial position of each of the subsidiaries jointventure companies and associates is annexed to the Consolidated Financial Statements. Thefinancial statements of the subsidiaries have also been hosted on the Company websitewww.iocl.com under the ‘Financial Performance' section.

In accordance with the provisions of SEBI guidelines your Company hasframed a policy for determining material subsidiaries which can be accessed on theCompany's website at https://www.iocl.com/download/Policies/Material_Subsidiary_Policy.pdf.

Related Party Transactions (RPTs)

During the year your Company entered RPTs which were on arm'slength basis and were in the ordinary course of business. As required under the provisionsof the Companies Act 2013 and SEBI (LODR) all RPTs were approved by the AuditCommittee.

During the year the Company had not entered into any transaction withrelated parties which could be considered material in accordance with the policy of theCompany on materiality of related party transactions.

In view thereof there is no transaction which needs to be reported inForm No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule8(2) of the Companies (Accounts) Rules 2014.

The Policy on Materiality of Related Party Transactions and on dealingwith Related Party Transactions as approved by the Board is hosted on the Company'swebsite and can be accessed at: https://iocl.com/download/RPT_Policy.pdf.

Energy Conservation Technology Absorption and foreign ExchangeEarnings and Outgo

Energy conservation is accorded utmost importance among the variousoperating parameters of the Company. The performance of all units is monitored on acontinuous basis and efforts are made for continuous improvement by incorporating thelatest technologies and global best practices. The various energy conservation measuresimplemented across the refineries during the year resulted in energy saving as well asmonetary saving. Under pipeline operations various initiatives were taken during theyear which resulted in reduction in Specific Energy Consumption by 13.5% over 2019-20.

In accordance with the provisions of the Companies Act 2013 and rulesnotified thereunder the details relating to Energy Conservation Technology Absorptionand Foreign Exchange Earnings and Outgo are annexed as Annexure-IV to the Report.

Board of Directors & Key Managerial Personnel

The following changes occurred in the Board / Key Managerial Personnelof the Company:

1. Shri Vinoo Mathur Shri Samirendra Chatterjee Shri C.R. Biswal DrJagdish Kishwan Shri Sankar Chakraborti and Shri D. S. Shekhawat ceased to be IndependentDirectors w.e.f. September 22 2020 consequent upon completion of their term.

2. Shri Akshay Kumar Singh ceased to be Director (Pipelines) w.e.f.February 1 2021 consequent upon resignation due to his appointment as Managing Directorof Petronet LNG Limited.

3. Shri Gurmeet Singh ceased to be Director (Marketing) w.e.f. April1 2021 consequent upon his superannuation.

4. Shri Rajendra Arlekar ceased to be an Independent Director w.e.f.July 11 2021 consequent upon his resignation due to his appointment as the Hon'bleGovernor of the State of Himachal Pradesh

Dr S. S. V. Ramakumar Director (Research & Development) and ShriRanjan Kumar Mohapatra Director (Human Resources) are liable to retire by rotation andbeing eligible are proposed to be re-appointed at the forthcoming Annual General Meeting(AGM).

A brief profile of the Directors proposed to be appointed / reappointedat the forthcoming AGM is provided in the notice of the AGM.

Independent Directors

The Company received the Certificate of Independence from theIndependent Directors confirming that they meet the criteria prescribed for IndependentDirectors under the provisions of the Companies Act 2013 and SEBI (LODR). TheIndependent Directors have confirmed that they have registered with the Databasemaintained by the Institute of Corporate Affairs (IICA) under the Ministry of CorporateAffairs and have also cleared the online proficiency self-assessment test as prescribed bythe IICA.

The Company being a Government Company the power to appoint Directors(including Independent Directors) vests with the Government of India. The Directors areappointed by following a process as per laid down guidelines. In the opinion of the Boardthe Independent Directors have the requisite expertise and experience.

A separate meeting of Independent Directors was held during the year asper provisions of the Companies Act 2013 and SEBI (LODR).

Board Meetings

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 to avoid duplication.

Board Evaluation

The provisions of Section 134(3)(p) of the Companies Act 2013 requirea listed entity to include a statement indicating the manner of formal evaluation ofperformance of the Board its Committees and of individual Directors. However the saidprovisions are exempt for Government Companies as the performance evaluation of theDirectors is carried out by the administrative ministry i.e. Ministry of Petroleum andNatural Gas (MoP&NG) as per laid-down evaluation methodology.

Significant and Material Orders Passed by the Regulators or Courts

No significant and material orders were passed by the regulators orcourts or tribunals during the year that impact the going concern status of the Companyand its operations in the future. The response to the notice issued by the

National Green Tribunal and Haryana State Pollution Control Board lastyear with regard to air and water pollution caused by the PTA Unit of Panipat Refinerywas provided by the Company. However as directed by NGT an amount of Rs 17.31 Crore wasdeposited ‘under protest' with CPCB as interim compensation for restoration ofthe environment. Since then plant operations had commenced. Subsequently based on thedirections received from the NGT a further amount of Rs 25 Crore was deposited as interimcompensation for restoration of the environment. In January 2021 the Joint Committeevisited the refinery and petrochemicals plant at Panipat to review the progress of thevarious initiatives as suggested by the Committee. The restoration plan was submitted bythe Committee in January and the final report on the progress of its recommendations tothe NGT in February 2021. The case was heard by the Hon'ble NGT in March 2021 and wasdisposed of with directions to complete all the recommendations of the Joint Committeewithin a time schedule.

Vigil Mechanism / Whistle-Blower Policy

The Company promotes ethical behaviour in all its business activitiesand has put in place a mechanism for reporting illegal or unethical behaviour. The Companyhas established a robust Vigil Mechanism and a whistle-blower policy in accordance withprovisions of the Act and Listing Regulations. Under the whistle-blower policy employeesare 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 Audit Committee as the case may be. Any complaint received is reviewed bythe Competent Authority or Chairman of the Audit Committee as the case may be. No employeehas been denied access to the Audit Committee. The policy on VigilMechanism/Whistle-Blower can be accessed on the Company's website at: https://iocl.com/download/Policies/Whistle_Blower_policy.pdf.

Details of Loans / Investments / Guarantees

The Company has provided loans / guarantees to its subsidiaries jointventures and associates and has made investments during the year in compliance with theprovisions of the Companies Act 2013 and rules notified thereunder. The details of suchinvestments made and loans / guarantees provided as on March 31 2021 are provided in theStandalone Financial Statement.

Annual Return

As required under the provisions of the Companies Act 2013 the AnnualReturn is hosted on the Company's website and can be accessed from the link:https://iocl.com/annual-return.

Compliance with Secretarial Standards

The Company complies with the applicable Secretarial Standards issuedby the Institute of Company Secretaries of India (ICSI).

Credit Rating of Securities

The credit rating assigned by rating agencies for the various debtinstruments of the Company is provided in the Corporate Governance Report.

Investor Education & Protection Fund (IEPF)

The details of unpaid / unclaimed dividend and shares transferred tothe IEPF in compliance with the provisions of the Companies Act 2013 has been providedin the Corporate Governance Report.

Material Changes Affecting the Company

The Covid-19 pandemic and the consequent lockdown in the country sincethe end of March 2020 had impacted the operations as well as sales of the Company.However the gradual relaxations in the lockdown during the year resulted in improvementin sales as well as operations. With the resurgence of the second wave of Covid-19 therehas been some impact on the demand of petroleum products since April 2021. The Company istaking necessary steps to overcome the challenges.

Directors' Responsibility Statement

Pursuant to Sec.134(3)(c) of the Companies Act 2013 pertaining to theDirectors' Responsibility Statement it is hereby confirmed that:

(a) in the preparation of the Annual Accounts the applicableaccounting standards had been followed alongwith proper explanation relating to materialdepartures;

(b) the Directors had selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concernbasis; 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 compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Acknowledgements

The Board of Directors would like to express its appreciation for thesincere dedicated and untiring efforts of the employees of the Company the contractlabourers and employees of business channel partners to ensure the supply of petroleumproducts across the country during the lockdown and restrictions caused by the Covid-19pandemic and for achieving an excellent performance despite challenges during the year.The Board would also like to thank the Government of India particularly the Ministry ofPetroleum & Natural Gas as well as the various State Governments regulatory andstatutory authorities for their support as well as guidance from time to time. The Boardis also thankful to all its stakeholders including bankers investors memberscustomers consultants technology licensors contractors vendors etc. for theircontinued support and confidence reposed in the Company. The Board would like to place onrecord its appreciation for the valuable guidance and significant contribution made byShri Vinoo Mathur Shri Samirendra Chatterjee Shri C. R. Biswal Dr JagdishKishwan Shri Sankar Chakraborti Shri D. S. Shekhawat Shri Akshay Kumar Singh ShriGurmeet Singh and Shri Rajendra Arlekar during their tenure on the Board of the Company.

For and on behalf of the Board
Sd/-
(Shrikant Madhav Vaidya)
Place: New Delhi Chairman
Date: July 27 2021 DIN: 06995642

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