Indian Oil Corporation Ltd
Chairman Speech
Dear Valued Shareowners,
Greetings to you on behalf of the 33,000-strong IndianOil team.
It is once again my proud privilege to communicate with you through this Annual Report.
This time, we have attempted to publish an Integrated Annual Report that not only details
the Company's financial performance but also re_ects its commitment towards value creation
for its stakeholders. The integrated report makes specific reference to six key capitals,
i.e., Financial Capital, Manufactured Capital, Human Capital, Intellectual Capital, Social
& Relationship Capital and Natural Capital.
The integrated report emphasises the strong bonds of trust that IndianOil has built
with its stakeholders over time and IndianOil's initiatives towards continuous growth in
an exciting world of challenges and opportunities.
Industry Trends
The overall global economy continues to be robust and there is a broad consensus on
acceleration of global GDP growth in the current year. India's GDP growth in 2018-19 is
expected to accelerate to 7.4%, driven by improving global demand, investment revival,
rejuvenation of rural demand, and reduction of internal barriers by GST.
For the global oil & gas industry, geo-political uncertainties remain a key factor.
After the comparatively lower price regime during 2014-17, crude oil prices began to rise
again from July 2017, impacting import-dependent economies like ours. The recent US
sanctions on Iran have added further uncertainty to an already volatile market. However,
Saudi Arabia and Russia have indicated increased supplies to provide a balance in the
interest of both oil-producing as well as oil-importing countries.
Oil-importing countries too are taking necessary steps for energy security. With our
plans of 10% reduction in oil imports by the year 2022, IndianOil is expanding its non-oil
energy portfolio as well as focussing on energy conservation and efficiency improvement
measures.
IndianOil: 3600 Excellence
I am delighted to inform you that 2017-18 has been a great year for the Company across
divisions and verticals, and we have once again surpassed previous records and posted a
remarkable performance, both in physical and fiscal terms.
The net profit of Rs. 21,346 crore is the highest ever earned by your Company and, for
the second consecutive year, IndianOil has emerged as the most profitable Central Public
Sector Enterprise.
Indeed, our differentiators are our strong financials – our net worth of Rs.
91,664 crore, our debt/equity ratio of 0.53:1 and our comfortable debt level of Rs. 58,030
crore. Our EBITDA of Rs. 43,079 crore is the highest ever; so are our earnings of Rs.
5,06,428 crore. As a national trust for economic prosperity, our contribution to the
exchequers is also high at Rs. 1,90,670 crore.
The total Equity (Share Capital and Reserves & Surplus) of the Company crossed
Rupees One Lakh crore during the year and stood at Rs. 1,10,171 crore as on 31st
March 2018.
Besides an interim dividend of Rs. 19/- per share paid during the year, the Board of
your Company has recommended a final dividend of Rs. 2/- per share. This is in addition to
successive issue of bonus shares in the ratio of 1:1 during the financial years 2016-17
and 2017-18.
Consolidating Core Business
IndianOil energises all sectors of the economy and all sections of society, taking a
wide range of products & services closest to the end-users through its countrywide
network of customer touch-points. The Company is constantly innovating and deploying
technology to align its processes, products and services with the changing aspirations of
its customers.
In 2017-18, IndianOil achieved record sales to lead the market, besides expansion of
marketing infrastructure and retail network, particularly fuel stations and LPG
distributorships. New aviation fuel stations (AFS) commenced operations at Puducherry,
Kadapa and Shillong, raising their total to 107. ‘Smart terminals' concept was
introduced at 21 more locations during the year, taking their cumulative tally to 84.
With rigorous monitoring and in-time execution of projects, IndianOil achieved the
capital expenditure target of over Rs. 20,000 crore for the year 2017-18.
IndianOil's LPG sales crossed 10 million tonnes during the fiscal. The Company released
more than one crore LPG connections for the third consecutive financial year. For customer
convenience, Indane refill booking facility was enabled through IndianOil's
official Facebook and Twitter pages also.
Daily price revision of automotive fuels, petrol and diesel, was rolled out across the
nation in June 2017 to further streamline the mechanism. The Company's automated fuel
stations have now crossed the 13,000 mark, covering 50% of the network, providing more
efficiency and transparency. Over 34% of them have also converted their operations to run
on solar energy.
IndianOil's SERVO brand improved its market share in finished lubricants during
the year. Several strategic steps were taken to further improve performance.
With Paradip Refinery achieving 100% capacity utilisation during the year, IndianOil
refineries together achieved a record annual throughput of 69 MMTPA, which was 5.8% higher
than that of the previous year. The year 2017-18 also witnessed the highest ever
production of MS, HSD, ATF, LPG, bitumen, polypropylene and Linear Alkyl Benzene. Mathura
& Panipat refineries commenced BS-VI grade auto fuel supplies to the National Capital
Territory (NCT) from April 1, 2018 to meet the advanced timeline.
To boost flexibility in crude oil sourcing, the Company's crude oil basket was further
expanded with inclusion of 16 new grades, 11 of which were of US origin. IndianOil was
also the first among Indian refiners to import and process US crude oil. Enhanced
operational efficiency, processing of opportunity crudes (heavy low-sulphur, heavy
high-sulphur and high-TAN) and a marked reduction in unplanned shutdowns helped improve
gross refining margin for IndianOil refineries.
Several initiatives were taken to minimise crude oil costs in a volatile market
scenario. Besides movement of the highest-ever quantity of crude oil by sea, better vessel
freight rates and reduction in shipping costs yielded additional savings.
For IndianOil pipelines too, 2017-18 was yet another year of expansion and
consolidation, as the network crossed the 13,000-km mark and achieved 3.5% higher combined
throughput compared to the previous year. With the commissioning of the 1,073-km
Paradip-Raipur-Ranchi pipelines system, finished products are now being pumped to all
terminals en route, resulting in significant savings in transportation costs.
In R&D, the year was marked by deployment of major in-house technologies at
the Company's refineries as well as commercialisation of many lubricant formulations. An
Octamax unit was commissioned at Mathura Refinery to produce high-octane fuel for BS-VI
gasoline pool with technology conceptualised by IndianOil R&D. Over 80 patents were
filed during the year and approval was received for 54, taking the total number of active
patents beyond 600. A BS-VI emission test facility was commissioned for all types of fuels
such as petrol, diesel, ethanol-blended petrol, bio-diesel, CNG, LNG, Hydrogen-CNG and
2G-ethanol blends as per superior BS-VI norms.
A number of indigenously developed technologies by IndianOil R&D are being deployed
while upgrading the Company's refineries for production of BS-VI fuels.
Accelerating Extended Businesses
IndianOil's growing business verticals of Petrochemicals, Natural Gas and Exploration
& Production have become integral business drivers for the Company.
Riding on a robust consumer demand and patronage, in addition to growing domestic
market, IndianOil's PROPEL brand petrochemicals have also found acceptance in 75
countries.
With focus on market expansion, the Company developed a number of polymer grades
customised to specific applications during the year.
IndianOil's natural gas sales grew by nearly 2% during the year. To meet growing
demand, the Company imported the highest-ever volumes of LNG during the year and also tied
up with producers for additional quantities.
The Company's upstream assets registered a 66% growth in annual production and a 99%
growth in revenue. Acquisition of stakes in Russian fields has been a major factor in this
uptick. During the year, IndianOil acquired participating interest in two more overseas
producing assets, Lower Zakum, Abu Dhabi, and Mukhaizna of Oman, as part of a consortium.
Preparing to be Future-Ready
As the leading refiner in the country and a dominant player across a diverse portfolio
of offerings in energy, IndianOil is focussing on all emerging opportunities for organic
and inorganic growth through vertical integration and strategic diversification, besides
pursuing value-creating research areas.
As part of this, projects costing approx. Rs. 32,000 crore are in various stages of
execution and plans are underway for implementing more projects costing about Rs.1.43 lakh
crore in the next five years.
Driven by the growing demand for POL products, IndianOil has ambitious plans to almost
double its current installed group refining capacity of 80.7 MMT per annum (MMTPA) to
about 150 MMTPA by the year 2030. This includes greenfield refineries of IndianOil
subsidiary Chennai Petroleum Corporation Ltd. (CPCL) and the proposed Ratnagiri Refinery
& Petrochemicals Ltd. (RRPCL), apart from numerous brownfield expansions.
RRPCL is proposed to be developed as the world's largest integrated greenfield
refinery-cum-petrochemicals complex. It will be built by an Indian consortium consisting
of IndianOil, BPCL and HPCL along with Saudi Aramco and ADNOC.
Several pipeline projects with a combined capital expenditure of over Rs. 20,000 crore
are under implementation. Upon completion, IndianOil's pipeline network would expand to
about 20,000 km in length. A 69-km pipeline is also being laid to transport petroleum
products to Nepal.
IndianOil has decided to infuse equity in Paradip Plastic Park Ltd, a JV with
Industrial Development Corporation of Odisha to promote downstream plastics-based units
near Paradip Refinery. The Company has plans for setting up a Textiles Park in Odisha
based on the feedstocks available from Paradip Refinery/Eastern India.
Looking at the future, the Company is strongly focussed on offering a bouquet of
eco-friendly energy options other than liquid fuels to its customers. These would include
natural gas, LNG, CNG, PNG, autogas, biogas, Hydrogen and electricity.
The 5-MMTPA LNG terminal being set up by IndianOil at Kamarajar Port in Ennore has
achieved an overall progress of over 90% till now and would be commissioned by the end of
the current year. In line with the growing requirement of gas, the Company is booking
capacities in other LNG terminals also, both on the east and west coasts of India.
IndianOil is developing three natural gas pipelines – Mallavaram-
Bhopal-Bhilwara-Vijaipur, Mehsana-Bhatinda & Bhatinda-Jammu through its joint
venture companies. IndianOil is partnering in the development of a 1,500-km natural gas
pipeline grid in the Northeast to connect Guwahati to other major cities of all N.E.
States.
IndianOil is currently operating City Gas Distribution (CGD) networks, offering CNG for
vehicles and PNG for households, in nine Geographical Areas (GA) through two joint
ventures. Considering the growth potential in gas business, the Company is aggressively
taking part in the various bidding rounds for Gas.
The Company is also collaborating with fleet owners and automobile manufacturers to
promote the use of LNG as transportation fuel.
During the year, the Company's R&D Centre took up demonstration trials on the
country's first Hydrogen fuel cell-powered bus in collaboration with Tata Motors. It has
also set up a pilot plant to facilitate studies on conversion of carbon-dioxide to
high-value lipids.
In sync with the expected demand for electric mobility, IndianOil was the first company
to set up a fast-charging station at Nagpur during the year, followed by one each at Delhi
and Kolkata and two in Hyderabad.
Comprehensive trials are on with reputed partners to achieve better performance and
durability in lead-acid batteries and other energy storage applications as well as
solar-to-green fuel technologies through the compressed solar power route.
For demonstration and scaling up of technologies developed in-house and for advanced
research on alternative energy options, nanotechnology, etc., a second campus of the
R&D Centre is coming up, also at Faridabad. The first phase of technology deployment
from the new campus is expected from 2019-20.
Under IndianOil Start-up Fund, 11 projects were selected for funding and incubation.
The projects are being mentored by in-house domain experts along with National Research
Development Corporation.
Considering the global high-price oil scenario, the Company is also looking at options
for part-substitution of transportation fuels with renewables. Petrol-ethanol blends are
already being marketed, and the same can be extended to methanol. Options of vegetable
oils, dimethylether and methanol are available for blending with diesel.
The Company is in the process of setting up three plants, in Gujarat, Haryana and UP,
for production of 2G-ethanol from lignocellulosic biomass like paddy straw, corn-cobs,
etc.
IndianOil is working on a new model to produce bio-CNG from Methane and its application
as a transportation fuel. For this, biogas produced from waste/bio-mass sources like farm
residue, cattle dung, sugarcane press mud, municipal solid waste and sewage treatment
plant waste would be utilised. This would also help utilise waste productively, minimise
emissions and reduce pollution. The Company has signed MoUs with nine parties to retail
Bio-CNG through its marketing network.
IndianOil has tied up with National Agricultural Cooperative Marketing Federation of
India Ltd. (NAFED) for facilitating the setting up of plants to process bio-mass/bio-waste
to produce bio-CNG.
Hindustan Urvarak & Rasayan Ltd. (HURL), incorporated in June 2016 as a joint
venture with Coal India Ltd. and NTPC for revival of the fertiliser plants located at
Gorakhpur (Uttar Pradesh), Sindri (Jharkhand) & Barauni (Bihar), has awarded LSTK
contracts for all the three projects. This has set the stage for commencement of
commercial production of neem-coated urea from all the three plants by the beginning of
the year 2021.
Besides overseas subsidiaries already operating in Sri Lanka, Mauritius and UAE, a new
subsidiary was incorporated in Singapore, a branch office was opened in Myanmar and a
representative office was opened in Bangladesh during the year. The Company has
established business ties with corporates operating in Bangladesh and Myanmar for
cooperation in marketing and allied services for LPG and ATF respectively.
Corporate with a Conscience
IndianOil has taken many initiatives on the sustainability and CSR fronts also.
IndianOil's portfolio of wind-power and solar energy has crossed 200 MW during the year.
The Company has also been focussing on reducing its carbon and water footprints, LED
lighting across installations, rainwater harvesting systems and waste-to-energy processes.
IndianOil has commissioned three waste-to-energy plants, each of 5 tonnes per day
capacity, in Varanasi under Swachh Bharat Abhiyan. The electricity produced from
biogas generated by these plants is being used to power street lights in the vicinity.
The Company's Mathura and Gujarat refineries have begun preparations for using treated
sewage water from Mathura and Vadodara cities for plant operations in place of fresh
water.
IndianOil has always been a corporate with a conscience, focussing on education &
skill development of unemployed and underemployed youth; drinking water & sanitation
for rural populace in far-_ung areas; health & hygiene through hospitals and medical
outreach; etc., in its comprehensive CSR programme.
The Company's 200-bed Assam Oil Division Hospital in Digboi, established in 1906, is
equipped with modern medical facilities. It caters to a population of 2 lakh, with the
catchment area extending to neighbouring Arunachal Pradesh and other nearby areas of the
Northeast. The Assam Oil School of Nursing, Digboi, was established in 1986 to provide
professional training in the field of nursing & midwifery to unemployed girls. The
Assam College of Nursing started functioning in the same premises in 1984 with intake of
30 students in B.Sc. (Nursing) course. A 50-bed Swarna Jayanti Samudaik Hospital
set up by IndianOil in Mathura, Uttar Pradesh, provides subsidised medical assistance to
residents near Mathura Refinery.
IndianOil had set up a Skill Development Institute (SDI) in Bhubaneswar in 2015. The
foundation stone for its permanent campus was laid by the Hon'ble President of India in
March 2018. Besides regular courses connected with petroleum & petrochemicals sectors,
SDI plans to offer skill courses in advanced technology areas such as Artificial
Intelligence, Internet of Things, Robotics, Machine Learning, Virtual/Augmented Reality,
3-D Printing, etc., in collaboration with IIT-Kharagpur.
The Hon'ble President of India also inaugurated the Institute of Chemical
Technology-Mumbai - IndianOil campus at Bhubaneswar. For this, IndianOil has collaborated
with ICTM to offer innovative programmes such as an integrated M.Tech., executive M.Tech.
for industrial personnel, as well as Ph.D. programmes.
As a special incentive to unemployed youth, the Company engaged over 3,500 apprentices
in technician trades during the year. They are being provided training and industry
exposure for one year along with stipend.
The IndianOil Foundation, a non-profit trust fully funded by IndianOil, has developed
tourist-friendly infrastructure and associated facilities at Konark Sun Temple in Odisha,
which include a state-of-the-art Interpretation Centre that showcases the unique
architectural features of the UNESCO world heritage site.
Support to sports is yet another area where the Company has made a mark. Many of its
leading sportstars have shone at the Commonwealth Games-2018 in Australia, bringing
laurels for India and IndianOil.
As part ofUjjwala Diwas, IndianOil conducted 7,453 LPG Panchayat events
pan-India and released 6.15 lakh new LPG connections. Over 1,000 senior officers across
divisions participated as facilitators in the day's events that brought together LPG
customers to discuss about safe and sustainable use of LPG.
Corporate success in the coming years will depend on understanding, assimilating and
using cutting-edge technology efficiently. Accordingly, IndianOil is revamping its IT
landscape to create a robust IT infrastructure and a digital Centre of Excellence. Besides
pump-locator maps, mobile apps and SMS services for retail customers, an integrated
portal, mobile app and MIS system were developed for institutional/bulk consumers.
IndianOil is in the process of setting up an ambitious customer-facing portal designed
to deliver next-generation customer experience and offer service/support across any line
of its business.
While technology will be a significant enabler in our business strategy, the key
differentiator will continue to be our human resource. Thus, it shall be the Company's
constant endeavour to address human interactions with care and sensitivity. The
Corporation's flagship Leadership Competency Development Programme, Project Saksham,
is creating new opportunities to make learning an ongoing process in the organisation,
besides regular need-based developmental interventions at transition points. I am also
happy to report that the Company is building e-learning platforms that will enable IOCians
to become independent learners and enhance their skill-sets and capabilities in order to
be future-ready.
Focussing on Trust as the ‘one thing that changes everything in business and
life', IndianOil is observing 2018 as the Year of Trust, and encouraging all
IOCians to not only internalise this core corporate value but also demonstrate it in full
measure in all their dealings both within and outside the Company. All our divisions are
making synergistic efforts to co-create a flexible and agile corporate focussed on
customer convenience and stakeholder value.
I look forward to the continued support and encouragement of all our shareholders in
this endeavour.
Sanjiv Singh
Chairman
  Â
Indian Oil Corporation Ltd
Directors Reports
Dear Members,
On behalf of the Board of Directors, it gives me immense pleasure to present the 59th
Annual Report of the Corporation for the financial year ended 31st March, 2018,
alongwith the Audited Standalone and Consolidated Financial Statements and Auditors'
Report thereon. During the year, the Corporation continued to clock excellent performance
on all operational parameters while meeting the energy needs and aspirations of the
country. All the business verticals of the Corporation performed exceedingly well during
the year.
PERFORMANCE REVIEW FINANCIAL
|
2017-18 |
2016-17 |
|
US$ Million |
Rs. in Crore |
US$ Million |
Rs. in Crore |
| Revenue from Operations |
78,565 |
5,06,428 |
66,395 |
4,45,442 |
| (Inclusive of Excise Duty & Sale of Services) |
|
|
|
|
| EBITDA |
6,683 |
43,079 |
5,364 |
35,989 |
| (Profit Before Exceptional Items, Finance Cost, Tax, Depreciation & Amortisation) |
|
|
|
|
| Finance Cost |
535 |
3,448 |
514 |
3,445 |
| Depreciation |
1,096 |
7,067 |
927 |
6,223 |
| Profit Before Tax & Exceptional Items |
5,052 |
32,564 |
3,923 |
26,321 |
| Exceptional Items |
- |
- |
- |
- |
| Profit Before Tax |
5,052 |
32,564 |
3,923 |
26,321 |
| Tax Provision |
1,740 |
11,218 |
1,075 |
7,215 |
| Profit After Tax |
3,312 |
21,346 |
2,848 |
19,106 |
| Balance Brought Forward from Last Year |
|
|
|
|
| Less: Appropriations |
|
|
|
|
| Interim Dividend paid |
1,397 |
9,005 |
1,272 |
8,531 |
| Final Dividend paid |
74 |
474 |
300 |
2,014 |
| Corporate Dividend Tax |
298 |
1,921 |
324 |
2,177 |
| Insurance Reserve (Net) |
3 |
20 |
3 |
20 |
| Bond Redemption Reserve |
78 |
503 |
69 |
466 |
| CSR Reserve (Net) |
- |
(3) |
- |
(1) |
| General Reserve |
1,462 |
9,426 |
880 |
5,899 |
| Balance Carried to Next Year |
- |
- |
- |
- |
SHARE VALUE
|
2017-18 |
2016-17 |
|
US$ |
Rs. |
US$ |
Rs. |
| Cash Earnings Per Share* |
0.47 |
29.98 |
0.40 |
26.72 |
| Earnings Per Share* |
0.35 |
22.52 |
0.30 |
20.16 |
| Book Value Per Share* |
1.78 |
116.23 |
1.62 |
105.21 |
* Adjusted for Bonus Shares issued during 2017-18 Note: Exchange Rate used:-
For 2017-18: Average Rate 1 US$ = Rs. 64.46 and Closing Rate 1 US$ = Rs. 65.18 as on
31.03.2018 For 2016-17: Average Rate 1 US$ = Rs. 67.09 and Closing Rate 1 US$ = Rs. 64.86
as on 31.03.2017
PHYSICAL
|
Million Metric Tonnes |
| Particulars |
2017-18 |
2016-17 |
| Refineries Throughput |
69.00 |
65.19 |
| Pipelines Throughput |
85.68 |
82.49 |
| Product Sales |
88.76 |
83.49 |
| (inclusive of Gas, Petrochemicals & Exports) |
|
|
CHANGES IN SHARE CAPITAL
During the year, the Authorised Share Capital of the Corporation was increased from Rs.
6,000 crore to Rs. 15,000 crore. Your Corporation issued bonus shares in the ratio of 1:1,
i.e., one bonus share in the ratio of one share held in March, 2018. Consequently, the
paid-up capital 21,346 increased from Rs. 4,855.90 crore to Rs. 9,711.81 crore. 19,106
11,242 DISINVESTMENT BY THE GOVT. OF INDIA
The Government of India disinvested 1,75,62,435 equity shares of the Corporation in
November, 2017 in favour of BHARAT 22 ETF (an exchange traded fund comprising 22 PSU
stocks). Consequently, the holding of the President of India in the equity share capital
was reduced to 56.98 per cent from 57.34 per cent.
DIVIDEND
The Board of Directors of your Corporation has recommended a final dividend of 20 per
cent, i.e., Rs.2/- per equity share of Rs.10/- each, on the post Bonus paid-up Share
Capital in addition to an interim dividend of Rs.19 per share on the pre-bonus paid-up
Share Capital paid in February 2018. This is the 51st consecutive year for
which your Corporation has recommended payment of dividend. So far, your 22.52 Corporation
has paid a cumulative dividend of Rs.49,167 20.16 crore, excluding the final
dividend of Rs.1,942.36 crore recommended for the current year, subject to approval by 11.86
members. The final dividend shall be paid to the members, whose names appear in the
Register of Members as well as the Beneficial Ownership Position provided by NSDL/CDSL as
at the close of 22nd August 2018.
The Board of your Corporation has formulated a Dividend Distribution Policy. The Policy
is annexed to the Board Report at 2015-16 Annexure 2016-17 I and is 2017-18 also
hosted on the website of the Corporation i.e. www.iocl.com. for Bonus Shares
CONTRIBUTION TO EXCHEQUER
Your Corporation has consistently been the largest contributor to the Government
exchequer in the form of duties and taxes. During the year 2017-18, Rs. 1,90,670 crore was
paid to the exchequer as against Rs. 1,79,014 crore paid in the previous year. An amount
of Rs. 1,03,362 crore was paid to the Central Exchequer and Rs. 87,308 crore to the State
Exchequer as against Rs. 1,02,817 crore and Rs. 76,197 crore paid in the previous
year to the Central and State Exchequer respectively.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of the Companies Act, 2013 and the Accounting
Standards issued by the Institute of Chartered Accountants of India, your Corporation has
prepared the Consolidated Financial Statement for the group, including its subsidiaries,
joint venture entities and associates. The highlights of the Consolidated Financial
Results are as follows:
| Particulars |
2017-18 |
2016-17 |
|
(US$ Million) |
(Rs. in Crore) |
(US$ Million) |
(Rs. in Crore) |
| Revenue from Operations |
|
|
|
|
| (Inclusive of Excise Duty & Sale of Services) |
79,979 |
5,15,542 |
67,640 |
4,53,795 |
| Profit Before Tax |
5,344 |
34,450 |
4,167 |
27,956 |
| Profit After Tax |
3,510 |
22,626 |
3,038 |
20,385 |
| Less: Share of Minority |
68 |
437 |
80 |
536 |
| Profit for the Group |
3,442 |
22,189 |
2,958 |
19,849 |
Note: Exchange Rate used:-
For 2017-18: Average Rate 1 US$ = Rs. 64.46 For 2016-17: Average Rate 1 US$ = Rs. 67.09
MoU PERFORMANCE
The Memorandum of Understanding (MoU) with the Government of India setting performance
parameters and targets for the year 2017-18 was signed by Chairman of the Corporation and
Secretary (P&NG), Govt. of India, on 4th July 2017. MoU targets for the
Corporation continue to be more challenging and tougher over the years. However, the
Corporation has been continuously striving to achieve new heights in terms of performance
numbers surpassing all previous achievements.
Periodical review on the performance was carried-out throughout the year. The
performance rating for 2017-18 is yet to be finalized by the Government. However,
considering the performance on financial parameters as well as achievements towards
physical parameters, overall MoU performance for the year is expected to be
"Excellent".
INTERNATIONAL TRADE
In order to meet the crude oil requirement of its refineries, your Corporation imported
58.01 million metric tonnes of crude oil during the year, as against 55.71 million metric
tonnes in the previous year. The selection of crude oil is carefully done from a
diversified mix of supply sources. The import of petroleum products during the year was
6.53 million metric tonnes as against 7.21 million metric tonnes in the previous year. The
Corporation also exported petroleum and petrochemical products during the year.
OPERATIONAL PERFORMANCE Refineries
The 9 refineries of your Corporation achieved the highest ever crude throughput of
69.00 million metric tonnes during the year 2017-18 as against 65.19 million metric tonnes
in 2016-17. The capacity utilisation was 99.7 per cent as against 94.2 per cent during
2016-17. The distillate yield of refineries of your Corporation improved to 80.4 per cent
from 78.8 per cent achieved during the previous year. The refineries also achieved
excellent energy parameters of Fuel & Loss and Specific Energy Consumption (MBN) at
8.75 per cent and 72.61 respectively, as against 9.4 and 74.9 registered during 2016-17.
The Mathura and Panipat refineries commenced BS-VI grade auto fuel supplies well in
time to meet the 1st April 2018 timelines for National Capital Territory.
To boost flexibility in crude oil sourcing, the Corporation's crude oil basket was
expanded with inclusion of 16 new grades, of which 11 were of US origin. Processing of
cheaper, heavy & high-TAN grades was stepped up to over 21.4 per cent during the year,
compared to 18.4 per cent in the previous year. Processing of high-sulphur crude oil was
also higher at 55.6 per cent compared to 51.6 per cent in the previous year.
Pipelines
The cross-country network of crude oil, petroleum and gas pipelines of your Corporation
has been its major strength in reaching out to new markets and customers and sustaining
its competitive advantage as the least-cost supplier. The crude oil pipelines achieved a
throughput of 51.08 million metric tonnes as against throughput of 51.34 million metric
tonnes during the previous year. The petroleum product pipelines recorded the highest ever
throughput of 34.60 million metric tonnes as against 31.15 million metric tonnes achieved
last year, registering a growth of 11.06 per cent. The gas pipelines also achieved the
highest ever throughput of 1,683 MMSCM during the year, as against a throughput of 1,587
MMSCM in 2016-17.
With the commissioning of 543 km of new pipeline sections during the year and
augmentation of existing pipelines, the total length of the pipeline network of crude oil,
product and gas pipelines as on 31st March 2018 expanded to 13,391 km with
cumulative throughput capacity of 94.79 MMTPA (crude oil and product) and 9.5 MMSCMD (gas
pipelines).
Marketing
Your Corporation continued to energise and empower all sections of the economy during
the year and achieved highest ever sales of 77.13 million metric tonnes of petroleum
products during the year, as against 74.11 million metric tonnes during the previous year.
In addition, 7.18 million metric tonnes of petroleum products were exported during the
current year as against 4.72 million metric tonnes exported during the previous year.
During the year, the Corporation commissioned 953 retail outlets (fuel stations,
including 502 Kisan Seva Kendra outlets in rural areas) taking their total number to
27,089. The Kisan Seva Kendra (KSK) outlets of the Corporation increased their
contribution to the total sales of Corporation with Petrol (Retail) touching a new high of
15.7 per cent and Diesel (Retail) touching 15.1 per cent. In addition, CNG facilities were
commissioned at 100 retail outlets during the year, which increased the CNG market share
by 3.29 per cent. Your Corporation continued with its focus on the use of alternate
energy, and 2,533 retail outlets were converted to operate on solar energy during the
year, taking their number to 9,140 outlets i.e. 34 per cent of the total number of retail
outlets.
During the year, the Corporation released new domestic LPG connections to 131.7 lakh
customers, out of which, 73.8 lakh connections were released under Pradhan Mantri Ujjwala
Yojana (PMUY), the flagship scheme of the Government of India, to the women of poor
households with an objective to improve the health of poor families by providing clean
cooking fuel. The Corporation achieved an all-time high LPG sales of more than 10.8 MMT
and bottling capacity was augmented by 540 TMTPA to meet the increased demand of LPG.
In the Lubricants segment, SERVO maintained its market leadership position
during the year and registered positive growth across all segments of finished lubricants.
PROJECTS
Your Corporation recognises the importance of infrastructure development and has been
consistently investing in several projects across the country. The project teams across
the divisions in the Corporation ensure that the projects are implemented seamlessly. The
projects are financed through an optimum mix of internal accruals and borrowings from
domestic as well as international markets whenever required. During the year, the
Corporation spent over Rs. 20,000 Crore on capital projects including Rs. 3,275 crore
through Special Purpose Vehicle. Despite the significant capital expenditure, the overall
borrowings of the Corporation increased only by Rs. 3,210 crore as most of the Capex
requirement was met through internal accruals.
The details of the projects completed, ongoing and future are as under:-
Completed Projects
• Phase-I of BS-IV fuel quality upgradation projects at Barauni and Gujarat
Refineries
• 1.3 MMTPA Petcoke evacuation facility at Paradip Refinery
• Feed Preparation Unit at Haldia Refinery
• Jharsuguda-Khunti section of Paradip-Raipur-Ranchi product pipeline
• 157 km of Paradip-Balasore section of Paradip-Haldia-Durgapur LPG Pipeline
Ongoing Projects
Refinery
• Distillate yield improvement project at Haldia Refinery
• Propylene Unit at Paradip Refinery Refinery
• Phase-2 of BS-IV Fuel Quality Upgradation Projects at Barauni and Gujarat
refineries
• BS-VI projects at all refineries
• Installation of INDMAX Unit alongwith associated facilities at Bongaigaon
Refinery
• Infrastructure facilities Refinery at Gujarat Refinery and Dumad for
Koyali-Ahmednagar-Solapur pipeline
• Infrastructure development for grid power import at 220 KV at Gujarat, Mathura
and Barauni refineries
• 7 Nos. additional crude oil tanks at Paradip Refinery
• Paradip-Haldia-Durgapur LPG pipeline
• Paradip-Hyderabad pipeline Refinery
• Augmentation of Paradip-Haldia-Durgapur LPG pipeline and its extension up to
Patna and Muza_arpur
• Jaipur-Panipat naphtha pipeline, along with augmentation of Koyali-Sanganer
pipeline
• CBR-Trichy pipeline
• Ennore-Trichy-Madurai LPG pipeline
• Ennore-Nagapattinam-Tuticorin-Madurai-Bengaluru natural gas pipeline
• 30" Crude Oil Pipeline in Haldia-Barauni section of Paradip-Haldia-Barauni
Pipeline and conversion of existing 18" twin pipeline in Haldia-Barauni section to
product and gas pipeline.
• Branch pipeline on Barauni-Kanpur pipeline to Baitalpur and Motihari
• Motihari-Amlekhgunj pipeline
• Koyali-Ahmednagar-Solapur pipeline
• Augmentation of Chennai-Trichy-Madurai pipeline
• Dhamra-Haldia Refinery Gas Pipeline with spurline to Paradip Refinery.
• Tundla-Gawria Pipeline with augmentation of Mathura-Tundla Pipeline
• Dahej-Koyali Natural Gas Pipeline
• LPG import terminal at Paradip and Kochi
• Augmentation of LPG terminal at Kandla from 0.6 MMTPA to 2.5 MMTPA
• LPG bottling plants at Banka, Gorakhpur, Bathinda, Goindwal Sahib, Agartala,
Mandla, Nagpur, Salem, Gwalior, Sitarganj, Trishundi, Korba Khurda, Shillong, Kharagpur
and Jodhpur.
• Product storage depots at Una (H.P.), Guntakal (A.P.) and Asanur (T.N.)
• 5-MMTPA LNG import terminal project at Ennore (through a Joint Venture Company)
• Ethylene Glycol Project at Paradip
Future Projects
• Barauni expansion to 9 MMTPA
• Expansion of PX/PTA Plant at Panipat Refinery
• Installation of Indjet Unit at Barauni
• Residue Upgradation and quality improvement project at Mathura Refinery
• Panipat Refinery Expansion from 15 MMTPA to 25
MMTPA
• Acrylics / Oxo Alcohol Project at Dumad, Gujarat
• Gujarat Expansion to 18 MMTPA
• Catalytic Reforming Unit at Guwahati Refinery
• Catalytic De-Waxing Unit (2nd chain) at Haldia Refinery
• LAB Expansion at Gujarat
• PX/PTA Project at Paradip
• 3G Ethanol from off-gas at Panipat
• Expansion of Naphtha Cracker and revamp of MEG at Panipat
• 2G Ethanol Project at Panipat
• Guwahati-Silchar-Imphal product pipeline
• Paradip-Somnathpur-Haldia Pipeline
• Kandla-Gorakhpur LPG Pipeline through a Joint Venture Company.
• 60 MMTPA West Coast Refinery in Maharashtra through a Joint Venture Company.
37 new lube grades were introduced during 2017-18 and 34 product approvals were
obtained from Original Equipment Manufacturers (OEMs). In the overseas markets also, SERVO
registered excellent performance with a growth of 18 per cent. SERVO now has a
global presence in 30 international markets.
The Aviation Service of the Corporation continued to maintain its leadership position
during the year and improved its market share to 61 per cent. During the year, your
Corporation commissioned its aviation fuel stations at Puducherry, Kadappa and Shillong.
Explosives & Cryogenics
During the year, the Explosives and Cryogenics businesses of your Corporation continued
with excellent performance and recorded the highest ever production and sales of
explosives and cryocans. The Explosives group manufactured and sold 1,76,757 metric tonnes
of explosives during the year, recording a growth of 12 per cent over the previous year's
volume of 1,57,661 metric tonnes. The Cryogenics group sold 28,782 units of cryocans and
cryovessels during 2017-18, as against previous year's sale of 27,694 units of cryocans
and cryovessels.
RESEARCH & DEVELOPMENT
The year was marked by deployment of major technologies developed by R&D Centre at
the Corporation's refineries. An Octamax unit was commissioned at Mathura Refinery to
produce high-octane fuel for BS-VI gasoline pool. The unit is a true amplification of the
‘Make in India' drive as the technology was conceptualised, engineered and executed
by R&D team and Mathura Refinery. The DHDT Unit at Gujarat Refinery based on indDiesel
technology developed by R&D centre was implemented during the year. The unit produces
Diesel meeting BS-VI norms for Sulphur. The flagship innovation of R&D centre, INDMAX
was adjudged winner in 22nd World Petroleum Congress in Turkey.
The R&D Centre filed for 82 patents and was granted 54 patents (14 Indian and 40
overseas) during the year. Your Corporation now has 611 active patents in its kitty.
India's quest for clean energy solutions crossed an important milestone with the
commencement of demonstration trials on the country's first fuel cell-powered bus at the
R&D Centre. Your Corporation has also acquired minority stake (4 per cent) in the
LanzaTech New Zealand Limited for US$ 20 million through its wholly owned subsidiary in
Singapore. LanzaTech, a company registered in New Zealand, is the global leader in
bio-based gas fermentation technology and the company provides novel and economic
technologies for production of ethanol and other high value chemicals from industrial
o_-gases of steel mills, petroleum refineries etc.
BUSINESS DEVELOPMENT
In order to achieve its vision of becoming ‘The Energy of India', your
Corporation has been expanding its business beyond petroleum refining and marketing. In
this context, the verticals of Petrochemicals, Natural Gas, Exploration & Production,
Alternative Energy and International Business are emerging as integral business drivers of
the Corporation in integrating and diversifying its business. Moreover, the portfolio of
the Corporation in these sectors has proved to be immensely beneficial with the profits
from these sectors offsetting the volatility from the Corporation's refining and marketing
Business areas.
Petrochemicals
Duringtheyear2017-18,theCorporationrecordedpetrochemicals sales (domestic and exports)
of 2.37 MMT as against 2.58 MMT in 2016-17. The sales volumes were lower mainly due to
shutdown of plants that restricted the production and resultantly the sales.
The Corporation's PROPEL brand of petrochemicals is the second largest in the
Indian petrochemicals market. The Corporation's offerings include Polymers, Linear Alkyl
Benzene, Paraxylene / Puri_ed Terephthalic Acid, Glycols and Butadiene. The Corporation is
a major supplier of Polymer products to leading multinationals. During the year, 30 new
Original Equipment Manufacturers approvals were obtained and 3 new grades were rolled out.
The global reach of PROPEL brand increased further, with its exports now reaching
75 countries. During the year, PROPEL was recognised by The Economic Times in the
Best Plastics & Polymers Brands 2018 as a "Symbol of Excellence in Plastics &
Polymers Industry".
Natural Gas
The Corporation is investing across the Natural Gas value chain in the country and is
committed to enhancing availability through expansion of infrastructure of Natural Gas in
the country. During the year, the overall Regasi_ed Liquefied Natural Gas (R-LNG) sales of
the Corporation was 1.89 MMT. The Corporation now has 58 R-LNG customers. In addition,
1.98 MMT of R-LNG was internally consumed in three of the Corporation's refineries, viz.
Panipat, Mathura and Gujarat while its Digboi Refinery consumed 0.06 MMT of
domestic gas.
Globally, the interest in usage of LNG as a transportation fuel is on the rise. The
Corporation has also been the pioneer in India in supplying LNG to customers not located
on the pipeline network through its ‘LNG at Doorstep' service. During the year, sale
of LNG through this model grew by 17.3 per cent over the previous year.
The Corporation imported 17 cargoes (1.13 MMT) of LNG during the year, against 11
cargoes (0.71 MMT) in the previous year. The Corporation has so far signed 22 Master Sales
& Purchase Agreements (MSPAs) with various international suppliers for purchase of LNG
on Spot/Short term basis of which 9 MSPAs were signed during the year.
The Corporation through its Joint Venture Company (JVC), IndianOil LNG Pvt. Ltd.
(IOLPL) is setting up a 5 MMTPA LNG Terminal at Kamarajar Port, Ennore in Tamil Nadu,
which will be the first LNG Terminal on the East Coast. The LNG Terminal is scheduled to
be commissioned in 2018-19.
The Corporation is operating/implementing City Gas Distribution (CGD) network in 9
Geographical Areas (GAs) through its two JVCs viz. Green Gas Ltd. (GGL) in Lucknow &
Agra and IndianOil-Adani Gas Pvt. Ltd. (IOAGPL) in Allahabad, Chandigarh, Panipat, Daman,
Ernakulam, Udham Singh Nagar & Dharwad. IOAGPL participated in 8th Round of
CGD Bidding invited by the Petroleum & Natural Gas Regulatory Board and emerged as
winner for South Goa and Bulandshahar GAs.
The Corporation is involved in developing three natural gas pipelines viz.
Mallavaram-Bhopal-Bhilwara-Vijaipur Pipeline through the JVC GSPL India Transco Ltd. and
Mehsana-Bhatinda Pipeline & Bhatinda-Jammu Pipeline through the JVC GSPL India Gasnet
Ltd.
Exploration & Production
The Corporation is engaged in upstream (Exploration & Production) activities
through its joint operations, joint ventures and wholly owned subsidiaries (WoS). The
upstream portfolio of the Corporation consists of 19 assets (9 domestic and 10 overseas)
with active Participating Interests (PI) ranging from 3 to 100 per cent. Out of 19 assets,
the Corporation has 8 Producing (7 overseas & 1 domestic), 3 domestic Discovered Small
Fields, 2 Coal Bed Methane, 1 overseas under Development, 2 domestic Exploration with
discoveries under appraisal and 3 under Exploration (2 overseas & 1 domestic) assets.
During the year, Hydrocarbon production increased by 66 per cent over last year from
1.61 MMT to 2.67 MMT from 6 overseas producing assets viz. Lower Zakum (UAE), Taas
(Russia), Vankor (Russia), Niobrara Shale Oil (USA), Pacific Northwest (Canada), Carabobo
(Venezuela) and one domestic producing asset i.e. Dirok (Assam, India).
A major highlight during the year was acquisition of new blocks overseas. The
Corporation acquired acquired 3 per cent PI in Lower Zakum, Offshore Abu Dhabi (UAE)
through a consortium with ONGC Videsh Ltd. and Bharat PetroResources Ltd. In addition to
this, the Corporation acquired 17 per cent PI in Mukhaizna Oil Field, a producing field in
Oman in April, 2018 resulting in an increase of its production profile by 20,400 boe/day.
A major milestone for the Corporation was the beginning of production of gas and
condensate from its Pre-NELP asset AAP-
ON-94/1 (Dirok Field) in August 2017. This marked the advent of its first domestic
exploration asset maturing from exploration stage to a producing asset. The Corporation
has 29.03 per cent PI in this asset.
Alternative Energy
The Corporation has a portfolio of 168 MW wind power and 34 MW solar PV, which includes
17.5 MW grid connected solar PV and 16.5 MW o_-grid solar projects (as on 31.03.2018). The
renewable power generated from the wind and solar projects was 337 GWh, which corresponds
to an emission reduction of metric tonnes carbon dioxide equivalent). During the year, 14
MW of solar PV capacity was installed and, work is in progress for installation of another
13 MW at various units of the Corporation.
The Corporation has also been selling solar lanterns as an energy access solution.
During the year, around 14,000 solar lanterns were sold through its LPG network.
Cumulatively, over 4.1 lakh solar lanterns have been sold by the Corporation.
The Corporation is setting-up three 2nd Generation Ethanol production plants
at Panipat (Haryana), Gorakhpur (UP) and Dahej (Gujarat) of 100 KL per day capacity each.
Under the aegis of Swachh Bharat Mission of the Govt. of India, two
waste-to-energy plants of 5 tons per day capacity each were commissioned in Varanasi by
the Corporation. The plants process organic Municipal Solid Waste and produce Biogas and
Compost. The electricity produced from the generated Biogas is being used to energise
street lights in the vicinity of each plant.
Sustainable Development
Your Corporation is deeply committed to the ethos of Sustainable Business. It has been
publishing Annual Sustainability Report since 2005-06. During the year, the Corporation
completed carbon and water foot-printing of all its refineries, pipelines & marketing
installations, and its IndianOil Institute of Petroleum Management, Gurgaon, and the
R&D Centre. The Corporation is replacing all the conventional lighting with LED lights
across all its installations. Cumulatively, 3.4 lakh conventional lighting has been
replaced with LED. During the year, 1.22 lakh trees were planted at various locations and
units of the Corporation. Waste paper recycling is another major initiative of the
Corporation and during the year 130 tonnes of waste paper was recycled, which includes
selling of waste paper to designated recyclers. The Corporation has installed 561
rainwater harvesting systems and cumulatively the systems have harvested 3.26 billion
litres of water during 2017-18.
Overseas Business Development
The Corporation has been constantly exploring various overseas downstream opportunities
with special focus on the neighbouring countries. During the year, the Corporation opened
offices in Dhaka, Bangladesh and Yangon, Myanmar. During the year, six export consignments
totalling 123 TMT consisting ATF, MS and HSD were supplied to neighbouring countries.
INFORMATION SYSTEMS & OPTIMISATION
The year witnessed a lot of activity in the area of cyber security both in the
Corporation and the cyber world with two major ransomware attacks globally, which a_ected
India also. However, there was no impact on the Corporation. Cyber Security Audit of
select locations was conducted to identify potential vulnerabilities and appropriate
mitigation steps were taken to strengthen the security wherever vulnerabilities were
found. A Centralized Security Operation Center (SOC) was commissioned in which the
security devices across the Corporation are now monitored centrally.
During the year, the customer-facing ePIC portal, first step towards delivering a
next-generation customer experience was launched. Customers, who require service or
support across any line of business of the Corporation, will have a single platform to
voice their issues, which would be appropriately routed to the concerned person in a
Centralised Grievance System, with a proper escalation matrix in place.
GST was successfully implemented in the Corporation on 1st July, 2017. The
first invoice from SAP was generated on time and your Corporation was first among Oil
Marketing Companies to roll out GST. During the year, Indane refill booking
facility was enabled through Facebook and Twitter in addition to other existing channels.
The Optimisation group in the Corporation carries out detailed analysis of demand
forecast for purchase of suitable crude oil cargoes through term contracts or spot
purchases, logistics arrangements, export of products, etc., to maintain supply of
products across the country as well as to optimise corporate profitability. During the
year, based on evaluation of crudes, 12.1 MMT of cheaper opportunity crudes were procured
and for the first time ever, 6.6 million barrels of US crude was also imported. The
Optimisation group also plays an important role in evaluation of projects by carrying out
a detailed analysis of supply & demand.
HEALTH, SAFETY & ENVIRONMENT (HSE)
Your Corporation is committed to conduct business with a strong environment conscience,
ensuring sustainable development, safe workplaces and enrichment of the quality of life of
its employees, customers and the community at large. All refineries of your Corporation
are certified to ISO:14064 standards for sustainable development as well as for the
Occupational Health & Safety Management System (OHSMS/OHSAS-18001), besides having
fully equipped occupational health centres. Compliance with safety systems and procedures
and environmental laws is monitored at the unit, division and corporate levels. The HSE
activities of the Corporation are reviewed in Board meeting. During the year, safety
audits were carried out at various offices and locations and various training programmes
were also conducted across the Corporation covering safety-related topics.
ENERGY CONSERVATION
Energy conservation is important key parameter in refining business and high importance
is accorded for the same at all the refineries and units of your Corporation. The
performance of various units is continuously monitored and efforts are made to keep
abreast of the latest technological developments and global best practices. As a result of
various energy conservation measures undertaken, the energy performance parameter (indexed
to the complexity of operations) in terms of MBN* of the refineries of your Corporation
during the year is down to 72.61, which is the best ever achieved, as against the energy
index of 81.9 in the previous year. The energy conservation schemes implemented during the
year in various refineries resulted in an estimated fuel savings of 63,093 MT Standard
Refinery Fuel (SRF) in the year, valued at about Rs. 149.4 crore. Under pipeline
operations, various initiatives were taken during 2017-18, which resulted in improvement
of Specific Range Consumption of Pipelines by 18.44 per cent.
*MBN–Thousand British Thermal Units / Barrel / Energy Factor (MBTU/BBL/NRGF)
HUMAN RESOURCES
Your Corporation has a strong and dedicated workforce as on 31st March 2018
of 33,157 consisting of 17,123 executives and 16,034 non-executives. This included 2,770
women employees comprising 8.36 per cent of the total workforce.
Your Corporation diligently follows the Presidential directives and guidelines issued
by the Government of India regarding reservation in services for SC/ ST/ OBC/ PWD (Persons
with Disabilities)/ Ex-servicemen to promote inclusive growth. Rosters are maintained as
per the directives and are regularly inspected by the Liaison Officer(s) of the
Corporation as well as the Liaison Officer of the Government of India to ensure proper
compliance. Grievance/ Complaint Registers are also maintained at Division/ Region/ Unit
levels for registering grievances from OBC/SC/ST employees. Efforts are made to promptly
dispose of representations/grievances received from them. In accordance with the
Presidential Directive, the details of representation of SC/ ST/OBC in the prescribed
format are attached at Annexure-II to the Report.
During the year, the Corporation received Presidential Directives issued by the
Ministry of Petroleum & Natural Gas for implementation of revision of pay and various
allowances payable to the Board level executives and below Board level Executives of the
Corporation. The Corporation is in the process of implementation of the directives
received in a phased manner.
The provisions of 4 per cent reservation for Persons with Disabilities in line with
guidelines/instructions issued by the Government of India are implemented by the
Corporation. Necessary concessions/relaxations in accordance with the rules in this regard
are also extended to physically challenged persons in recruitment. The number of employees
with disabilities as on 31st March 2018 was 611 constituting 1.84 per cent of
the total employee strength.
Your Corporation maintained cordial industrial relations during the year, and continued
to provide comprehensive welfare facilities to its employees to take care of their health,
efficiency, economic betterment, etc. and to enable them to give their best at the
workplace. Your Corporation supports the participative culture in the management of the
enterprise and has adopted a consultative approach with the collectives, establishing a
harmonious relationship for industrial peace thereby leading to higher productivity.
Employees' participation is ensured through information-sharing with collectives and
employees on a regular basis while seeking their support, suggestions and cooperation. The
efforts to promote employees' participation in management were continued during the year
through Suggestions Scheme, Total Productivity Maintenance (TPM) and various employee
engagement initiatives.
Your Corporation has initiated steps towards formulation of an Employee Value
Proposition (EVP) with an objective of establishing and promoting the Corporation's
Employee Brand amongst the potential employees. An EVP is a unique set of benefits, which
employees receive in return for skills, capabilities and experience they bring to a
Company. While addressing the basic question "Why should I work for you", it
enables a _rm to position itself as employer of choice and thus, attract best talent
besides providing a reason to the existing employees for working with an organisation.
During an experiential workshop facilitated by XLRI Jamshedpur, a taskforce of 25 officers
framed few EVP statements. These statements are being tested externally with students of
B-schools and engineering institutes as potential employees; and internally within the
Corporation to validate their relevance and attractiveness after which a structured EVP
will be finalised.
Your Corporation emerged as one of the best employers in India and first amongst the
Public Sector Undertakings in the Great Place to Work assessment conducted by the Great
Place to Work Institute, in association with the Economic Times. IndianOil YuvaUrja, a
platform for connecting with Gen Y/Millennials and sharing information on your
Corporation's employee-friendly policies has been developed to connect with both potential
employees and the executives joining your Corporation.
1145 Executives were recruited during 2017-18 from various reputed institutes and
through all India open recruitment exercise. IndianOil has a well defined Common Corporate
Induction Module (CCIM), a specially designed and standardised program to facilitate the
transition of these young executives from academic life to professional life. To ensure
that they get integrated in the organization, all the new executives are provided with
Divisional Induction Module, followed by ‘On-the-Job' training. The Induction Modules
are tailor-made for Divisions to provide a holistic overview of the working of respective
Divisions. Each executive is provided with a mentor within the first week of joining at
their respective locations as part of IndianOil Mentoring Programme – "Gurumitra".
Your Corporation has a structured succession planning framework linked to the
leadership development system for developing leaders at all levels from within. Besides
regular developmental interventions, your Corporation's flagship Leadership Competency
Development Programme for executives - "Saksham" is a progressive step
towards ‘need-based' development of leadership competencies – Strategic,
Operational, Business Results, Customer, Talent, Content, Change and Relationship. The
modules under Project "SAKSHAM" have been developed and being delivered by the
best B-Schools in the country, viz. IIMs – Ahmedabad, Bangalore, Calcutta and XLRI
Jamshedpur.
The scope of Project Saksham, which was earlier focused on officers
transitioning from Middle to Senior Management (Grade F, G and H), was expanded during
2017-18 to include officers undergoing transition from Junior to Middle Management (Grade
D & E). In 2017-18, nearly 400 executives in Grades F, G & H and nearly 250
executives in Grades D & E were covered under this programme. To meet the increased
coverage, IndianOil tied up with other IIMs - Lucknow, Indore, Kozhikode and Shillong.
Your Corporation is committed to implementation of Hindi at its various offices /
locations / units in day-to-day functioning. The provisions of Official Language Act, 1963
and Rules noti_ed thereunder are complied with. The communications received in Hindi and
any application, appeal or representation written or signed by an employee in Hindi is
replied-to in Hindi. The Official Language Implementation Committees (OLIC) have been
formed and are functioning in all offices / units. The Committees review the progress of
implementation of official language policies.
RIGHT TO INFORMATION ACT (RTI)
Your Corporation has put in place an elaborate mechanism across the organisation to
deal with matters related to Right to Information Act, 2005 since its inception. The
Corporation has designated one Nodal Officer based at Corporate Office and 34 First
Appellate Authorities (FAAs), 45 Central Public Information Officers (CPIOs) and 45
Assistant Public Information Officers (APIOs). The details of all the designated
officials, 3rd party audit reports etc. are hosted on the website of the Corporation. Your
Corporation has aligned with the online RTI portal launched by DoPT and all the
applications / appeals received through the portal have been disposed off through the
portal only. The Quarterly Reports / Annual Reports have been submitted through online
portal of Central Information Commission – www.cic.gov.in within the prescribed time
limit. A total of 7331 requests and 851 first appeals were received during the year and
all have been disposed off within the stipulated time. 239 second appeals were filed
before the Central Information Commission, New Delhi and all have been disposed off after
due follow-up without any adverse remarks from 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 the Corporation with the clear
objective of providing protection to women against sexual harassment at the workplace and
for prevention and redressal of complaints. Internal Complaints Committees have been set
up at Unit/Region/Head Office level, headed by senior level women executives, to deal with
sexual harassment complaints, if any, and conduct enquiries.
There were six complaints of sexual harassment, which were pending as on 1st
April, 2017. During the year 2017-18, one complaint was received and four complaints were
disposed off. As on 31st March, 2018, three complaints are pending.
Regular workshops are held especially for women employees with an objective to bring
awareness about their rights and facilities at workplace and emphasizing the provisions of
the Act. During the year, 65 workshops/awareness programmes were conducted. Gender
sensitization programmes, sensitizing the male employees, are also being conducted
regularly. Newly recruited employees in the Corporation are made aware of the provisions
of the Act and the measures adopted by the Corporation to prevent such incidents.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Corporation has utilized 100% of the CSR Budget allocated for the year 2017-18,
amounting to Rs. 331.05 crore. This gratifying achievement exempli_es your Corporation's
unstinted commitment to serve the society, which has been an integral philosophy of
conducting its business operations since inception.
In addition to serving the Nation through thousands of marketing and operation
touch-points across the country, your Corporation, through its CSR outreach, has touched
hearts and souls of millions of under-privileged citizens with care and passion, the key
values, which your Corporation actively nurtures and espouses.
During 2017-18, your Corporation reached out to a large number of beneficiaries through
a variety of CSR initiatives. Under its flagship healthcare initiatives viz. Swarna
Jayanti Samudayik Hospital, Mathura
(Uttar Pradesh); AOD Hospital, Digboi (Assam); Sarve Santu Niramaya, Digboi (Assam);
your Corporation treated more than 76,100 patients. Assistive devices were provided to 900
Divyangjans across 4 States and about 23,400 animals were given various healthcare
treatments for their well being. Under various Skilling initiatives across India viz.
Skill Development Institute, Bhubaneswar (Odisha); Multi-Skill Development Institute,
Digboi (Assam); Skill Development Centre, Barauni (Bihar) etc., 1,200 beneficiaries were
skilled in various trades. Through projects like IndianOil Gyanodaya, scholarships were
provided to more than 6,100 students across India. For meeting basic livelihood needs viz.
drinking water and electricity, IndianOil Jal-Jeevan projects were rolled out in 30
villages and IndianOil Surya-Prakash (solar) projects were implemented in 25 villages.
As a progressive step towards strengthening Industry-Academia partnership, Institute of
Chemical Technology (ICT) Mumbai and IndianOil have agreed to jointly start an Integrated
Masters programme in Chemical Engineering (5-years), with a strong emphasis on industry
internship. ICT Mumbai – IndianOil Odisha Campus (ICTM-IOC), Bhubaneswar will also
offer Executive M. Tech. in Chemical Engineering and Ph. D. Programmes under UGC/Industry
fellowships.
The Hon'ble President of India inaugurated Institute of Chemical Technology Mumbai -
IndianOil Odisha Campus, Bhubaneswar and laid the foundation stone of the main campus of
Skill Development Institute, Bhubaneswar on 18th March, 2018.
A report on your Corporation's CSR activities as per the provisions of the Companies
Act, 2013 along with the CSR Highlights for FY 2017-18 is attached at Annexure-III to
the report. The composition of the CSR Committee is provided in the Corporate Governance
Report. The CSR Policy of the Corporation can be accessed at the website of the
Corporation on the link https://iocl.com/aboutus/ Ioc_S&CSR_policy.pdf
VIGILANCE
The Vigilance department acts as a link between the organisation and Chief Vigilance
Commissioner. The objective of the vigilance function is to ensure maintenance of the
highest level of integrity throughout the Corporation. The Vigilance group takes
preventive, punitive and participative steps, with emphasis on the preventive and
participative aspects. During the year, 94 vigilance awareness programmes were conducted,
which were attended by about 2,300 employees.
Disciplinary action under applicable Conduct, Discipline and Appeal Rules, 1980 and
Certified Standing Orders were taken by the Corporation for irregularities/lapses. The
number of disciplinary matters related to vigilance cases disposed off during the year
2017-18 was 57. The number of such cases pending at the end of year 2017-18 was 35. The
aforesaid cases pertain to irregularities such as indiscipline, dishonesty, negligence in
performance of duty or neglect of work etc. The Corporation continuously and regularly
endeavours to ensure fair and transparent transactions through technology interventions
and system/process review in consultation with Central Vigilance Commission and Internal
Vigilance set-up.
PUBLIC DEPOSIT SCHEME
The Public Deposit Scheme of the Corporation was closed with effect from 31st
August, 2009. The Corporation has not invited any deposits from the public during the year
and no deposits are outstanding as on 31st March, 2018 except the old cases
amounting to Rs. 55,000/-, which remain unpaid due to unsettled legal / court cases.
CORPORATE GOVERNANCE REPORT
The Corporate Governance Report highlighting the endeavours of your Corporation in
ensuring transparency, integrity and accountability in its functioning has been
incorporated as a separate section, forming a part of the Annual Report.
MANAGEMENT'S DISCUSSION & ANALYSIS REPORT
The Management's Discussion & Analysis (MDA) Report, as required under Corporate
Governance guidelines, has also been incorporated as a separate section forming a part of
the Annual Report.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report covering initiatives taken with environmental,
social and governance perspective has been prepared in accordance with the directives of
SEBI and forms a part of the Annual Report.
AUDIT COMMITTEE
The Audit Committee of your Corporation comprises three members, all of whom are
Independent Directors. The recommendations made by the Audit Committee during the year
were accepted by the Board. The other details of the Audit Committee, like its
composition, terms of reference, meetings held, etc., are provided in the Corporate
Governance Report.
CODE OF CONDUCT
The Board of your Corporation has enunciated a code of conduct for the Directors and
senior management personnel, which has been circulated to all concerned and has also been
hosted on the Corporation's website. The Directors and senior management personnel have
affirmed compliance with the code of conduct.
RISK MANAGEMENT
Your Corporation has a well laid-down risk assessment & management process. A Risk
Management Compliance Board comprising senior management personnel and headed by Chief
Risk Officer reviews the various risks associated with the Corporation's business. The
Corporation has constituted a Risk Management Committee comprising whole-time Directors,
which oversees risk management activities. A report is, thereafter, put up to the Audit
Committee and the Board.
INTERNAL FINANCIAL CONTROLS
Your Corporation has put in place adequate internal financial controls for ensuring the
efficient conduct of its business in adherence with laid-down policies; the safeguarding
of its assets; the prevention and detection of frauds and errors; the accuracy and
completeness of the accounting records; and the timely preparation of reliable financial
information, which is commensurate with the operations of the Corporation. The Corporation
also has a separate Internal Audit department headed by a Chief General Manager, who
directly reports to the Chairman. The Internal Audit department has a mix of officials
from finance and technical functions, who carry out extensive audit throughout the year.
The statutory auditors are also required to issue the Independent Auditor's Report on the
Internal Financial Controls of the Corporation under Clause (i) of Sub-Section 3 of
Section 143 of the Companies Act 2013. The report issued thereupon has been attached
alongwith the Standalone and Consolidated Financial Statements respectively.
REMUNERATION TO THE AUDITORS
The Office of the Comptroller & Auditor General of India had appointed the
Statutory Auditors for the financial year 2017-18. The Auditors' remuneration for the year
2017-18 has been _xed at Rs. 145 lakhs plus applicable taxes. In addition, reasonable
out-of-pocket expenses incurred are also reimbursed at actuals.
COST AUDIT REPORT
Cost Auditors were appointed for conducting the cost audit of the Corporation's
refineries, lube blending plants and other units for the year 2017-18. A remuneration of
Rs. 18.50 lakhs and applicable taxes had been _xed by the Board for payment to the cost
auditors for the year 2017-18, which was rati_ed by the shareholders in the last AGM. The
cost audit for the year 2016-17 was carried out for various units of the Corporation and
the cost audit report was filed by the Central Cost Auditor with the Central Government in
the prescribed form within the stipulated time period. The cost audit report for 2017-18
would also be filed within the stipulated time.
SECRETARIAL AUDIT
The Secretarial Audit Report for the year 2017-18 confirms that the Corporation has
complied with the applicable provisions of the corporate laws, guidelines, rules, etc.,
which are within the purview of the Corporation. The report, duly certified by a
practising Company Secretary, is attached at Annexure-IV to this Report.
The Secretarial Auditor has made an observation that the Corporation has not complied
with the conditions with regard to minimum number of non executive Directors and
Independent Directors in the composition of Board of Directors for the period 01.04.2017
to 21.09.2017 and with regard to appointment of Woman Director for the period 01.04.2017
to 26.10.2017. In this regard, it is clari_ed that the Corporation being a Government
Company under the administrative control of the Ministry of Petroleum & Natural Gas,
the selection and appointment of Directors, (including Independent Directors and Woman
Director) vests with the Government of India as per the Government guidelines.
PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES (MSEs) ORDER 2012
Your Corporation has taken steps for implementation of the Public Procurement Policy of
the Government of India for procurement from MSEs. All efforts are made to procure items
specified for procurement from MSEs. In addition, necessary provision has been made in all
the tenders stating the eligibility of MSEs to participate in the tender. As against the
target of 20 per cent for procurement from MSEs, the actual procurement of your
Corporation from MSEs during the year was 24.09 per cent (excluding crude oil & gas).
During the year, 54 vendor development programmes were conducted to develop small and
medium enterprises.
SUBSIDIARIES AND JOINT VENTURES
During the year, a new Joint Venture Company, viz. Ratnagiri Refinery and
Petrochemicals Limited between your Corporation, BPCL and HPCL was incorporated in Sept.
2017 for the purpose of setting up of 60 MMTPA Refinery and Petrochemical Project in
Ratnagiri district of Maharashtra. The equity holding of partners is IndianOil : 50 per
cent; BPCL : 25 per cent and HPCL : 25 per cent. Subsequently in April, 2018, an MoU was
signed between the JV Partners and Saudi Aramco to explore the possibilities of joint
development of the project with induction of Saudi Aramco as a strategic partner.
IndianOil CREDA Bio-fuels Ltd., a Subsidiary of the Corporation was wound-up during the
year and the name of the Company was struck-off from the Register of Companies by Ministry
of Corporate Affairs on 08.03.2018.
As required under the provisions of the Companies Act, 2013, a statement on the
performance and financial position of each of the subsidiaries and joint venture companies
is provided as an annexure to the Consolidated Financial Statement. The financial
statements of the subsidiaries have also been hosted on the website of the Corporation
i.e. www.iocl.com under ‘Financial Performance' section.
In accordance with the provisions of the SEBI guidelines, your
Corporation has framed a policy for determining material subsidiaries, which can be
accessed on the Corporation's website at the link https://www.iocl.com/InvestorCenter/
Policy_on_Material_Subsidiary.pdf
RELATED PARTY TRANSACTIONS (RPTs)
In line with the provisions of the Companies Act, 2013 and SEBI guidelines, a policy on
material RPTs has been framed, which can be accessed on the website of the Corporation at
link https:// www.iocl.com/InvestorCenter/Policy_on_related_party_ transactions.pdf. Your
Corporation has undertaken transactions with related parties during the year in the
ordinary course of business. In line with the RPT Policy, approval of the Audit Committee
& Board, as the case may be, were obtained for such RPTs. As per the threshold
mentioned in the policy, there was no material RPT during the year. The disclosures
related to RPTs in accordance with applicable accounting standards are provided at Note-37
of the Standalone Financial Statement.
The details of contracts or arrangements with related parties referred to under Section
188 (1) of the Companies Act, 2013 in the prescribed Form AOC-2 are attached at Annexure
-V of the report.
REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
In accordance with the provisions of the Companies Act, 2013 and rules framed
thereunder, the details relating to Energy Conservation, Technology Absorption and Foreign
Exchange earnings and outgo are annexed at Annexure-VI to the report.
PARTICULARS OF EMPLOYEES
The provisions of Section 197 of the Companies Act, 2013 and rules notified thereunder,
regarding particulars of employees drawing remuneration in excess of limits specified are
exempt for Government Companies.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
The following changes occurred in the Board / Key Managerial Personnel of the
Corporation:-
Appointment
1. Shri Vinoo Mathur, Shri Samirendra Chatterjee, Shri Vivek Rae, Shri Chitta Ranjan
Biswal, Dr.Jagdish Kishwan, Shri Sankar Chakraborti, Dr.B.Mahadevan and Shri Dharmendra
Singh Shekhawat, were appointed as Independent Directors w.e.f. 22.09.2017.
2. Smt. Urvashi Sadhwani was appointed as Government Director w.e.f. 27.10.2017.
3. Shri B.V.Rama Gopal was appointed as Director(Refineries) w.e.f. 12.02.2018.
4. Shri Ranjan Kumar Mohapatra was appointed as Director(Human Resources) w.e.f.
19.02.2018.
5. Ms. Sushma Taishete Rath was appointed as Government Director w.e.f. 11.05.2018.
6. Shri Kamal Kumar Gwalani was appointed as Company Secretary and Key Managerial
Personnel w.e.f. 01.09.2017.
Cessation
7. Shri Verghese Cherian ceased to be Director (Human Resources) w.e.f.
01.11.2017 consequent upon his superannuation.
8. Shri B.S.Canth ceased to be Director(Marketing) w.e.f. 01.02.2018 consequent upon
his superannuation.
9. Dr. B. Mahadevan, Independent Director resigned from the Board of the Corporation
due to his pre-occupation on 19.03.2018.
10. Shri Anish Aggarwal ceased to be Director(Pipelines) w.e.f. 01.04.2018 consequent
upon his superannuation.
11. Smt. Urvashi Sadhwani ceased to be Director w.e.f. 11.05.2018 consequent upon her
elevation as Principal Adviser to MoP&NG.
12. Shri Vivek Rae, Independent Director resigned from the Board of the Corporation
w.e.f. 04.06.2018.
13. Ms. Sushma Taishete Rath ceased to be a Director w.e.f. 06.07.2018, consequent upon
her transfer from MoP&NG. 14. Shri Raju Ranganathan, ceased to be Company Secretary
and Key Managerial Personnel w.e.f. 01.09.2017 consequent upon his superannuation.
The Corporation has received the Certi_cate of Independence from all the Independent
Directors confirming that they meet the criteria prescribed for Independent Directors
under the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015.
A separate meeting of Independent Directors was held during the year as per provisions
of the Companies Act, 2013 and SEBI LoDR.
Shri G.K.Satish, Director(P&BD) is liable to retire by rotation and being eligible
is proposed to be re-appointed at the forthcoming Annual General Meeting.
A brief profile of the Directors proposed to be appointed / re-appointed at the
forthcoming AGM is provided in the notice of the AGM.
BOARD MEETINGS
During the year, 13 meetings of the Board of Directors were held. The details of the
meetings attended by each Director are provided in the Corporate Governance Report and
hence not repeated here to avoid duplication.
PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The provisions of Section 134(3)(p) of the Companies Act, 2013 require a listed entity
to include a statement indicating the manner of formal evaluation of performance of the
Board, its Committees and of individual Directors. However, the said provisions are exempt
for Government Companies as the performance evaluation of Directors is carried out by the
Administrative Ministry i.e. Ministry of Petroleum and Natural Gas (MoP&NG) as per
laid down evaluation methodology.
POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The provisions of Section 134(3)(e) of the Companies Act, 2013 regarding the policy on
Directors appointment and remuneration including criteria for determining quali_cations,
positive attributes, independence of a Director and other matters provided in Sec 178(3)
are exempted for Government Companies.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant and material orders were passed by the regulators or courts or tribunals
that impact the going concern status of the Corporation and its operations in future.
VIGIL MECHANISM/WHISTLE-BLOWER POLICY
The Corporation has framed a whistle-blower policy wherein the employees are free to
report any improper activity resulting in violation of laws, rules, regulations or code of
conduct by any of the employees, to the Competent Authority or Chairman of the Audit
Committee, as the case may be. Any complaint received is reviewed by the Competent
Authority or Chairman of the Audit Committee as the case may be. The policy provides that
the con_dentiality of those reporting violations shall be maintained and they shall not be
subjected to any discriminatory practice. No employee has been denied access to the Audit
Committee. The policy on Vigil Mechanism/Whistle-Blower can be accessed on the
Corporation's website at the link https://www.iocl.com/
InvestorCenter/Whistle_Blower_policy.pdf
DETAILS OF LOANS/INVESTMENTS/GUARANTEES
Your Corporation has provided loans/guarantees to its subsidiaries/joint ventures and
has made investments during the year in compliance with the provisions of the Companies
Act, 2013. The details of such investments made and loans/guarantees provided as on 31st
March, 2018 are given in the Standalone Financial Statement under Notes 4, 5, 36 and 42.
EXTRACT OF ANNUAL RETURN
As required under the provisions of the Companies Act, 2013, the extract of Annual
Return for the financial year ended 31st March, 2018 in the prescribed form MGT-9 is
attached at Annexure-VII to this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
Your Corporation complies with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India (ICSI).
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under clause (c) of sub-section (3) of Sec.134 of the
Companies Act, 2013 with respect to the Directors' Responsibility Statement, it is hereby
confirmed that:
(a) in the preparation of the Annual Accounts, the applicable accounting standards had
been followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the company at the end of the financial year and of
the profit and loss of the company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013 for
safeguarding the assets of the company and for preventing and detecting fraud and other
irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis; and
(e) the Directors had laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and were operating
effectively.
(f) the Directors had devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENTS
The Board of Directors would like to express its deep appreciation for the dedicated
and sincere efforts of the employees of the IndianOil family for the superlative
performance achieved during the year 2017-18. The Board would also like to thank the
Government of India, particularly the Ministry of Petroleum & Natural Gas as well as
the various State Governments, regulatory and statutory authorities for their valuable
guidance and support from time to time. The Board is also thankful to all its
stakeholders, including bankers, investors, members, customers, consultants, technology
licensors, contractors, vendors, etc., for their continued support and confidence reposed
in the Corporation. The Board would like to place on record its appreciation for the
valuable guidance and significant contribution made by Shri Verghese Cherian, Shri
B.S.Canth, Shri Anish Aggarwal, Dr.B.Mahadevan, Smt.Urvashi Sadhwani, Shri Vivek Rae and
Ms. Sushma Taishete Rath during their tenure on the Board of the Corporation.
|
For and on behalf of the Board |
|
(Sanjiv Singh) |
| Place: New Delhi |
Chairman |
| Date : 16th July 2018 |
DIN: 05280701 |
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