Indian Oil Corporation Ltd
Chairman Speech
Dear IndianOil Investors,
My heartiest greetings to you on my personal behalf and on behalf of IndianOilPeople.
It is my pleasant duty once again to present to you the Integrated Annual Report of
your Company for the financial year 2018-19, focussing on the performance highlights of
the year and the high-growth agenda lined up for the future.
You will notice that, like last year, this year too we have followed the Integrated
Reporting format focussing on the Company’s six key capitals -- Financial Capital,
Manufactured Capital, Human Capital, Intellectual Capital, Social & Relationship
Capital and Natural Capital.
Without an iota of doubt, IndianOil’s strength as a successful enterprise stems
from its rich human capital. With a proud legacy of fuelling the growth of all segments of
the economy for the past six decades, the 33,000-strong team of lOCians is gearing to play
a leadership role in these exciting times as a new India rises on the global arena.
IndianOil People take pride in being future-ready by continuously upgrading their skills
and capabilities.
Your Company has kept its promises to the nation since inception, working for
self-sufficiency and security in energy and related areas. Surmounting many challenges, it
achieved sustained growth in sync with the nation to become India’s leading Maharatna
PSU and one of the largest commercial undertakings.
As the fastest growing economy in the world, India requires access to abundant energy,
delivered in new and affordable ways. IndianOil is fully geared for the challenge. Over
50,000 customer touch points of your Company spread across every nook and corner of the
nation provide energy solutions to a billion-plus customers to keep India on the move. And
we are further expanding our refining capacity, supply & distribution channels and
marketing network in line with the growing domestic demand.
Today, as a low-carbon future beckons on the horizon, IndianOil is engaged in building
a future full of clean and green energy. We are leading the industry in an unprecedented
quantum leap from BS-IV fuels to a world-standard BS-VI compliant regime by April 2020. In
line with global trends, we are investing in a big way in India’s emerging natural
gas economy with new products and offerings for diverse customer groups. We are deeply
committed to the sustainability principle and are progressively integrating alternative
energy and renewables in our operations as well as in our expanding bouquet of offerings.
Global and Indian economic scenario
• Global economic growth slowed down to 3.6% in 2018, from 3.8% in 2017
• Growth in emerging economies also decelerated to 4.5% in 2018, from 4.8% in 2017
• Economic deceleration due to rising trade protectionism, US-China trade
tensions, etc.
• Indian economy grew by 6.8% in 2018, fastest growing large economy
• Growth propelled by private spending, industry, manufacturing and capital
formation
• Retail inflation (CPI) slowed down to 3.41%, lowest in last seven years
The fount of your Company’s future-readiness is its world-class R&D Centre,
which gives shape to products and technologies of the future. Its rich repository of
intellectual capital has now crossed a major milestone of over a thousand patents.
INDUSTRY SCENARIO
The hydrocarbons sector has contributed enormously to global economic progress over the
last century. Today, however, it is facing competition from new and emerging energy
options and technologies. The 21st century is definitely going to witness
economies based on clean fuels, and low-carbon options will get progressively entrenched
in the energy mix, with policy backing. It is time for the oil & gas corporates to
once again reinvent themselves and continue to play a lead role, especially in those parts
of the world like India where primary energy consumption continues to register a dramatic
rise.
The need of the hour is to integrate new technologies like digitalisation, Artificial
Intelligence, Internet of Things, etc., in all segments of the industry, together with
innovative process technologies, to provide efficient, clean and green energy solutions
for all customer segments and businesses to ensure that nation’s economic growth is
not hampered in any way.
The domestic refining sector is attempting a very ambitious project of leap-frogging
from BS-IV to BS-VI fuels regime. Indian refiners are on track to usher in the cleanest
automotive fuels across the country from April 2020. In fact, IndianOil refineries have
completed over 90% of the BS-VI projects and should be ready to supply the upgraded fuels
well within the stipulated timeline. The success of this ambitious initiative will further
enhance India’s credentials as a world-class refining hub in Asia, with the fourth
largest refining capacity (249.4 MMTPA) in the world.
The country has robust supply & distribution channels, a 30,000-km network of oil
& gas pipelines, about 24,000 LPG distributors, and over 64,600 fuel stations, with
another 55,000 in the offing.
Road to reform: India’s fuels upgradation programme
• BS-IV fuels implementation across India: Completed by April 2017
• BS-VI fuels implementation in NCT: Completed by April 2018
• BS-VI implementation in NCR and Agra: Underway from April to Oct. 2019
• BS-VI fuels implementation across India: To be completed by April 2020
• Estimated investment of OMC refineries on BS-III to BS-VI conversion projects:
Rs. 53,500 crore
Global oil & gas scenario
• Global primary energy consumption grew by 2.3% in 2018, as against 1.9% in 2017
• Oil demand grew by 1.2%, with natural gas as the fastest growing fuel,
accounting for 44.5% of the increase in total energy demand
• Brent crude oil prices averaged $71.1 per barrel in 2018, registering a
significant increase of $16.7 per barrel over 2017
Indian oil & gas scenario
• India’s petroleum products consumption in 2018-19 was 211.6 MMT, with 2.7%
growth over 2017-18
• Petrol consumption rose by 8.1%, diesel by 3%, and LPG by 6.8%
• India’s refining capacity stood at 249.4 MMTPA at the end of 2018-19,
second largest in Asia
• Crude oil imports rose by 2.8% to 226.6 MMT
• Indian crude oil basket averaged at $69.8/barrel in 2018-19, 23.8% higher than
2017-18 level
INDIANOIL: STRENGTHENING CORE BUSINESS
Your Company’s performance in the financial year 2018-19 has been exceptional in
terms of both operational and financial parameters. Besides posting all-time high records
in the three major parameters - sales as well as refineries and pipelines throughputs -
the Company crossed the Rs. 6 lakh crore milestone in turnover for the year, with handsome
profits. With numero uno position in the downstream petroleum sector, the Company
continued with its legacy of putting the nation first and providing viable fuel solutions
to diverse customer groups, while at the same time strengthening its new verticals of
E&P, Petrochemicals and Gas.
Marketing
Your Company, which caters to nearly half of India’s petroleum consumption,
registered its best ever sales volumes in 201819. In the backdrop of India’s primary
energy demand outpacing global demand, rising infrastructure projects and a surge in
commercial vehicle sales led to record high diesel consumption in 2018-19. Matching this
pace of growth, IndianOil maintained its place at the top and did well in institutional
sales too, registering increase in market share in all products. Similarly, your
Company’s time-tested commitment and service to the defence forces and the security
eco-system of the nation have won many accolades.
IndianOil: Fuelling a billion dreams
• IndianOil’s turnover crossed Rs. 6 lakh crore milestone in 2018-19
• Sales, including exports, in 2018-19: 89.89 MMT
• Exports in 2018-19:5.24 MMT
• Number of customer touch-points crossed the
50,000 mark
• Total No. of fuel stations automated: 27,700
• New heights in aviation fuelling, with 116 AFSs.
As the industry leader in retail sales, IndianOil completed automation of its
countrywide fuel stations network during the year to enhance Q&Q (quality &
quantity) assurance to its customers. The ambitious Project Dhruva initiative
currently underway encompasses new technologies and services to achieve greater efficiency
in operations and a superior buying experience for your Company’s retail customers.
LPG for all: Clean fuel, better life
• Total LPG households in India: 26.5 crore
• PaHaL households receiving subsidy in their bank accounts: 24.5 crore
• PMUY target: Deposit-free LPG connections to 8 crore BPL households by 2020
• PMUY target achieved till now: 7.2 crore households
• LPG penetration achieved: Over 94%
• New Indane connections released in 2018-19: Over 2 crore, highest in a year
• IndianOil’s LPG sales surpassed 1 million tonnes a month
Over the last five years, your Company has had the privilege of spearheading mega
schemes like PaHaL LPG subsidy scheme, #GiveItUp campaign and PMUY
(Pradhan Mantri Ujjwala Yojana) that have made clean energy accessible across
socioeconomic divides.
IndianOil has been extending the reach of its Indane Superbrand to more
households every year. Leading the push for clean energy, the Company released the highest
ever number of new LPG connections in a year in 2018-19.
SERVO, another IndianOil Superbrand, achieved top position in the retail lubes
segment for the first time in recent years, besides registering impressive growth in
overall finished lubes. Your Company’s aviation fuelling business too gained higher
altitude with addition of nine more Aviation Fuel Stations (AFS) during the year.
Your Company exported 5.24 million tonnes of products in 2018-19. Product exports to
Nepal rose from 2.1 to 2.4
million tonnes and export of Indane Nanocut (additised LPG suited for high-temperature
industrial applications) to Bangladesh commenced during the year. IndianOil opened a new
representative office in Nepal in addition to existing offices in Myanmar and Bangladesh,
and full-fledged subsidiaries operating in Sri Lanka, Mauritius, Singapore and UAE.
Refineries
IndianOil refineries excelled in all major physical parameters and achieved a record
combined crude oil throughput during 2018-19. The refineries also registered the best ever
numbers in Specific Energy Consumption (MBN), Energy Intensity Index (Ell) and Fuel &
Loss.
A world-scale Polypropylene (PP) plant was commissioned at Paradip Refinery in Feb.
2019 to act as the mother unit in nurturing the downstream plastics processing industry in
the region. Work has also commenced on a Monoethylene Glycol (MEG) plant at Paradip
Refinery, which is envisaged as a key driver for the textiles industry in the region,
especially for polyester fibre. Two other major projects in progress are: capacity
expansion of IndianOil’s Barauni Refinery and an ATF production unit using the
in-house INDJet technology of IndianOil’s R&D Centre.
The energy for India’s rise
• Refineries throughput in 2018-19: 71.82 MMT
• Major projects commissioned during 2018-19:
• PP plant at Paradip Refinery: 680 KTA
• Major projects commenced during 2018-19:
• MEG plant at Paradip Refinery: 357 KTA
• Barauni Refinery expansion from 6 to 9 MMTPA
• ATF production unit using IndJet technology
• 4.6 MMT term contracts concluded for crudeoil from USA
For the first time, your Company concluded term contracts for sourcing crude oil from
USA during the year, besides enhancing its capabilities to process crude oil grades from a
wider and cheaper basket, with flexibility for sourcing additional volumes in term
contracts to manage contingencies.
Pipelines
During 2018-19, IndianOil’s crude oil & product pipelines clocked the highest
ever combined throughput, setting a new record for the fifth consecutive year. The
countrywide pipelines network provides immense competitive advantage to the Company in the
new era of digitally-aided logistics.
Pipelines: Arteries for energy flow
• Pipelines throughput during 2018-19: 88.53 MMT
• Pipelines length commissioned in 2018-19: 950 km
• Major among them:
• Paradip-Haldia-Durgapur LPG pipeline: 516 km
• Jaipur-Panipat naphtha pipeline: 344 km
• Total length of pipelines network: 14,231 km
• Combined throughput capacity: 94.2 MMTPA for liquid pipelines and 21.69 MMSCMD
for gas pipelines
• Major pipeline projects underway:
• Kandla-Gorakhpur LPG pipeline: 2,757 km
• Indradhanush gas grid in the northeast: 1,656 km
Work has commenced on two major pipeline projects with joint venture (JV) partners
during the year 2018-19. The Kandla-Gorakhpur LPG Pipeline, on completion, will be the
longest LPG pipeline in the world, and will directly feed 22 bottling plants en route. The
project will be executed by a JV of IndianOil, BPCL and HPCL. IndianOil has also formed a
JV, Indradhanush Gas Grid Ltd., with ONGC, OIL, GAIL and NRL to develop a gas pipelines
grid connecting all the State capitals of the northeast.
Other than its City Gas Distribution (CGD) projects and those with JV partners, 17
pipeline projects of the Company with a combined capex of about Rs. 24,000 crore are in
various stages of implementation. On their completion in the next three years,
IndianOil’s pipelines network will expand to about 21,500 km.
Research & Development
IndianOil’s R&D Centre is shaping into a game-changer in the ensuing
competitive scenario as your Company adds new technologies, products and services to its
bouquet of offerings.
The year 2018-19 saw your Company further build upon the confidence reposed by its
customers by developing and commercialising products and process technologies that cater
to the changing industry needs.
Inventing the future with world-class R&D
• Over four decades of R&D expertise in lubricants formulation, refinery
processes, pipeline transportation, catalysts & additives, alternative fuels, etc.
• Over 1,000 patents bled till date; 100 to 120 patents per annum in the last five
years
• Over 100 new lubricant formulations developed in 2018-19, 87% commercialised
• State-of-the-art Product Applications Development Centre for polymers business
• Support to start-ups in energy and social innovation sectors
Adding to the Company’s intellectual wealth, the R&D Centre crossed a stellar
milestone of filing its 1,001st patent recently. IndianOil’s IP
(Intellectual Property) portfolio currently comprises 794 active patents, of which 542
patents were granted abroad and 252 in India. Your Company has a higher commercialisation
rate for its patents than the global average. Several of the quality upgradation projects
implemented at IndianOil refineries for production of BS-VI fuels are based on deep
desulphurisation, isomerisation and dimerisation technology patents developed in-house.
The R&D Centre also commissioned a 5 tonnes-per-day plant at Faridabad for
converting organic waste to biogas with a methane content of over 80% based on a novel
bio- methanation technology developed in-house. The Centre is also commercialising a 2G
ethanol process, together with a novel enzyme, which reduces ethanol production costs by
30%.
Your Company incurred a capital expenditure of Rs. 28,200 crore in 2018-19; the capital
outlay for the current fiscal is Rs.25,083 crore.
BUILDING NEW BUSINESSES
Besides making significant investments in upstream assets and petrochemicals, which are
making significant additions to the Company’s business in terms of equity oil and
profitability, IndianOil is integrating natural gas and renewables in its energy value
chain in a big way to be ready for a low-carbon future.
Exploration & Production
With a balanced portfolio of producing, discovered and exploration assets, your Company
achieved significant progress in terms of 2P reserves, production volumes, equity oil and
revenues during the year 2018-19.
IndianOil currently has participating interest (PI) in 10 domestic and 12 overseas
E&P assets spread across 10 countries. The year 2018-19 was marked by acquisition of
PI in E&P assets in Oman, Abu Dhabi and Israel.
Heading upstream for energy security
• Balanced portfolio of E&P assets; 10 in India and 12 overseas
• Overseas assets spread across 10 countries: Canada, USA, Russia, Venezuela, Abu
Dhabi, Oman, Libya, Nigeria, Gabon and Israel
• Strategic tie-ups with over 20 reputed national & international energy
corporates
• Acquired participating interest in E&P assets in Oman, Abu Dhabi and Israel
in 2018-19
Petrochemicals
IndianOil is fast evolving into a petrochemicals major and has registered a robust
11.4% growth in sales in 2018-19. Backed by world-scale plants and world-class technology,
IndianOil’s PROPEL brand petrochemicals cover over 80% of a broad spectrum
applications in plastics and are exported to over 70 countries.
Your Company has invested heavily in this vertical over the last two decades, incurring
a capex of over Rs. 25,000 crore
Propelling growth with petrochemicals
• Petrochemicals sales in 2018-19: 2.64 MMT
• Production capacity enhanced to 3.15 MMT
• Major ongoing projects:
• MEG plant at Paradip
• Expansion of Naphtha Cracker at Panipat
• New projects envisaged till 2023-24
• Acrylic acid/Oxo-alcohol project at Gujarat
• PX/PTA project at Paradip
• Petcoke gassification in Paradip
• Textiles project in Eastern India
• PBR project at Panipat
in major petrochemical projects such as LAB plant at Gujarat, PX/PTA plant and Naphtha
Cracker at Panipat, and PP plant at Paradip. Among the major ongoing projects are MEG
plant at Paradip and capacity expansion of Naphtha Cracker at Panipat.
IndianOil has firm plans to invest Rs. 26,000 crore on various ongoing and new
petrochemical projects till 202324 to consolidate business. These projects include revamp/
augmentation of existing capacities and new projects as well as equity investment in Hindustan
Urvarak & Rasayan Ltd. (HURL).
The IndianOil Board has also accorded approval for a Plastics Park at Paradip through a
JV with Industrial Development Corporation of Odisha. Similarly, Board approval has been
obtained for land procurement and finalisation of a JV partner for a textiles project at
Bhadrak in Odisha. Industrial Promotion & Investment Corporation of Odisha has
allotted 60 acres of land for the textiles project.
Natural Gas
Natural gas is transforming into a major businessline for your Company, and the recent
commissioning of the state-of-the-art LNG import terminal at Ennore has given it a big
boost.
As the second largest player in this growing segment, IndianOil is building
infrastructure and retail networks to reach out to all user segments:
industry-transport-homes-commercial establishments.
Fuelling the future with natural gas
• Natural gas sales in 2018-19: 3.96 MMT
• Capacity of Ennore LNG terminal: 5 MMTPA
• Geographical Areas (GA) won by IndianOil on its own after 9th and 10th
round of CGD bidding: 17
• GA won in partnership with JVs: 23
• Total tally of GAs with IndianOil: 40
• Investments in CGD over next 8 years, including equity contribution inJVs: Rs.
10,000 crore
With a portfolio of about 60 R-LNG customers, besides supplies to the Company’s
own refineries at Mathura, Panipat and Koyali, IndianOil registered a 2.6% growth in
natural gas sales in 2018-19.
Besides being a JV partner in Indradhanush natural gas pipeline grid in the Northeast,
your Company is investing in two more joint ventures that are laying three gas pipelines
of a combined length of 3,760 km covering nine States.
Your Company is pursuing an ambitious agenda in city gas distribution (CGD) covering 40
Geographical Areas (GA) on its own as well as with reputed joint venture partners.
IndianOil’s investment on development of CGD networks in the next eight years is
likely to be about Rs. 10,000 crore.
Alternative Energy
Your Company is fully aligned to the country’s aspirations to transit to clean
energy and has planned Rs. 25,000 crore investment in green energy projects. Besides a
target to scale up its solar energy and wind-power portfolio to 260 MW by the year 2020,
IndianOil has initiated diversification into alternative, renewable energy and
bio-fuels-2G &3G ethanol, waste-to-energy and compressed bio-gas (CBG).
Your Company is spearheading the Government’s innovative SATAT (Sustainable
Alternative Towards Affordable Transportation) initiative launched in 2018 as a waste-
to-wealth measure. With similar calorific value and other properties, CBG has the
potential to replace CNG as an affordable fuel in automotive, industrial and commercial
uses by conversion of biomass, or any kind of organic waste. In fact, the evolving CBG
programme will go a long way in reducing India’s dependence on crude oil imports.
Green energy for a green future
• Rs. 25,000 crore investment planned in alternative energy and sustainable
development projects
• Solar energy and wind-power portfolio to be scaled up from 212 MW to 260 MW by
the year 2020
• LOIs issued for 96 plants to supply 782 tonnes per day of CBG under SATAT
initiative
• 5,000 more Company fuel stations converted to run on solar energy in 2018-19
• Cumulative installed capacity of Company’s 14,000+ solar-operated fuel
stations: 77 MW
FUTURE-READY CORPORATE
Your Company is implementing an ambitious Rs. 2 lakh crore investments plan in the next
5-7 years to evolve into a future- ready corporate that provides comprehensive energy
solutions to diverse user groups in an exciting phase of energy transition and technology
disruptions.
Besides focus on refinery expansions, new technologies for clean fuels & enhanced
outputs, and refinery-petrochemicals integration, IndianOil is aggressively leveraging its
R&D expertise to move into horizon technologies like 2G & 3G ethanol, bio-fuels,
coal gasification, H-CNG, Hydrogen fuel cells, battery technologies, etc. These
technologies, along with cleaner fuels and higher engine efficiencies, can offer
sustainable solutions to today’s energy challenges.
Keeping this in view, your Company is pursuing a number of new technologies and/or
pilot studies in the areas of refinery processes, petrochemicals & polymers,
alternative energy and bio-energy in collaboration with reputed partners in India and
abroad.
Going closer to consumption centres and consumers in an economical and
environment-friendly manner has been the philosophy behind IndianOil’s pipeline
network expansion. And, as the Company grows its LPG and LNG verticals rapidly, its gas
pipelines network too is set for phenomenal growth.
Your Company aspires to be a major player in natural gas, with leadership in the R-LNG
segment, and is taking steps to enhance its share in LNG sourcing, import terminals,
crosscountry pipelines, city gas distribution networks and bulk supplies by road-tankers.
Your Company is targeting its own equity oil & gas of 7 MMTPA from its upstream
portfolio by the year 2023-24 from 4.39 MMTPA currently, and is continuously on the
lookout for acquisition of stakes both in E&P companies as well as individual assets.
You may be aware that your Company had incorporated Hindustan Urvarak & Rasayan
Ltd. (HURL) in June 2016 as a joint venture with Coal India Ltd. and NTPC for revival
of three fertiliser plants at an estimate cost of Rs. 21,000 crore. Work is progressing at
a fast pace on the three plants located at Gorakhpur (Uttar Pradesh), Sindri (Jharkhand)
& Barauni (Bihar) and commercial production of neem-coated urea from all the three
plants is likely to commence in the first half of the year 2021.
In step with the times
Your Company has a remarkable legacy of growing in step with the times. A certified Great
Pace to Work, IndianOil is continuously improving its human eco-system to achieve
cross-divisional synergy and a solutions-oriented approach. The human resource capital is
being leveraged in a big way to
make your Company a truly learning organisation with access to both natural and formal
developmental opportunities for all. E-learning is being mainstreamed across the
organisation and lOCians across functions are being actively encouraged to acquire new
knowledge and skills to be active partners of a 21st century organisation
focussed on growth opportunities of the future. With the enterprise getting increasingly
younger, new and innovative learning models are being deployed to enable lOCians to
continuously improve products and processes.
Your Company’s business strategy has always been in tune with technology and
innovations. We have installed the best of automation processes and the latest safety
systems at our installations. Optimised operations and logistics, smart terminals,
automated fuel supply points and a dedicated held force are helping us lead the
competition. We have now embarked on digital transformation of the organisation to serve
and sustain the trust of our billion-plus customers across 50,000+ customer touch-points.
Your Company’s 33,000-strong team represents a formidable array of talent and
skills, technical and managerial expertise, demographic diversity and a ‘can do’
attitude infused with the core values of Care, Innovation, Passion and Trust.
This signifies a very bright future for IndianOil. The idea is to create an eco-system of
growth for all-round excellence in our pursuit to create happy customers through
high-quality products and services, delivered efficiently.
Generations of lOCians have had one thing in common - a steadfast commitment to the
idea of India, and IndianOil as ‘The Energy of India.' As we complete 60 years
of our operations, I can confidently say that the best of IndianOil has just begun.
I look forward to your support and encouragement for the journey ahead.
(Sanjiv Singh)
Chairman
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Indian Oil Corporation Ltd
Directors Reports
Dear Members,
On behalf of the IndianOil Board, I present to you the 61st
Annual Report and the third Integrated Annual Report of the Company for the financial year
ended March 31, 2020, along with the Audited Standalone and Consolidated Financial
Statements and Auditors report thereon.
Matching the pace of the energy demand in the country, the Company
posted robust performance during the year, retaining its numero-uno position in the
downstream petroleum sector and strengthening its new verticals of Gas, Petrochemicals and
E&P.
THE RESILIENT COMPANY: TREADING THROUGH THE COVID-19 CHALLENGE
The unprecedented COVID-19 novel Coronavirus, followed by the lockdown
enforced by various countries to flatten the rising curve of the pandemic, had severely
impacted businesses across the world. In India too, the Government announced a nationwide
lockdown with effect from March 25, 2020, which continued with certain relaxations till
May 31, 2020. Thereafter, the lockdown was lifted partially by the Central and State
Governments with few restrictions.
Despite the lockdown, the dedicated workforce of the Company as well as
its channel partners put in their best to maintain the supply lines of fuels for
households and essential / emergency services across the country.
Since the commencement of the nationwide lockdown, the Company put in
place a comprehensive strategy to maintain business continuity while also ensuring the
health and safety of all its stakeholders, including its employees, channel partners,
their subordinate staff, and a large number of contract workers.
The Company had witnessed a demand growth of 0.8% for petroleum
products in 2019-20 till February 2020. However, sales declined by 21% in March 2020 due
to the lockdown, dragging down the growth for the entire year to -1.1%. The performance of
the Company was impacted by the prolonged lockdown, leading to lower sale of petroleum
products by 46% during the month of April 2020 as well. With relaxations by the Central
Government as well as the State Governments, product sales improved from May onwards but
remained lower as compared to that of the previous year. During the period April -July
2020, the sale of petroleum products was only 74% of the sales achieved during the
corresponding period last year. The Natural Gas sales, which had grown by 19% in 2019-20,
witnessed a fall in April -May, 2020 falling to 74% of April -May, 2019 levels. With
relaxations and ease of lockdown by the Central and State Governments, Natural Gas sales
improved from June onwards and growth rates of 15% and 17% were achieved in June &
July, 2020 respectively.
Some significant steps taken by the Company in the face of the pandemic
are as under:
• All operating locations, i.e., refineries, pipelines, terminals,
depots, LPG bottling plants, lube blending plants, etc., remained operational throughout
the lockdown period. Nearly 60% of the employees continued to work from regular
work-places and the rest remotely or from home.
• While the lower demand of petroleum products impacted
refineries' throughput, the Company took immediate steps to increase LPG production by
optimising refinery operations to meet the sharp rise in demand caused by the lockdown as
well as provision of free LPG refills for three months to PMUY customers under Pradhan
Mantri Garib Kalyan Yojana (PMGKY).
• Despite the lockdown, the Company delivered about 25 lakh
cylinders to the doorsteps of its customers every day, with its bottling plants and the
field force toiling together as a team.
• Due to the fall in domestic demand for petroleum products, the
Company undertook exports on a continuous basis to maintain its refinery operations.
• While some crude oil cargoes meant for the refineries were
either deferred or rescheduled, some were diverted to fill the country's strategic
petroleum reserves to benefit from prevailing low prices.
• Additional storage was created in locations wherever possible by
re-commissioning tanks on a war-footing.
• Medical insurance cover for COVID-19 was provided to about
3,23,000 frontline personnel, including retail outlet customer attendants, LPG delivery
boys, POL tank-truck crew, DGR guards on pipeline patrol duty, operators and crew of the
Mobile Manufacturing Unit (MMU) of the Explosives group, etc.
• In order to extend a helping hand to the families of contract
workers and the workforce of business partners who are exposed to the risk of contracting
COVID-19, the Company has announced ex-gratia assistance of R 5 lakh to the family of any
such worker who expires due to COVID-19.
• Comprehensive advisories on safe practices to avoid virus
transmission, covering various aspects like social distancing, work-from-home, meetings
over digital platforms, telemedicine, etc., were prepared and shared with all locations
for strict implementation.
• A standard operating procedure was developed wherein locations
are required to ensure wearing of masks and availability of hand-sanitisers at key
touch-points. The Company took up in-house production of hand-sanitisers wherever possible
and provided the same to the district administration and law enforcement personnel.
• Security controls were put in place in line with the new
work-from-home norms to counter cyber-attacks.
• The Company contributed R 225 crore to PM CARES fund for
COVID-19 relief. In addition, all the employees of the Company contributed two days'
salary amounting to R 24 crore to the fund.
PERFORMANCE REVIEW FINANCIAL
| Particulars |
2019-20 |
2018-19 |
| US$ Million |
Rin Crore |
US$ Million |
Rin Crore |
| Revenue from Operations (Inclusive of
Excise Duty & Sale of Services) |
79,976 |
5,66,950 |
86,686 |
6,05,932 |
| EBITDA |
|
|
|
|
| (Profit Before Exceptional Items, Finance Cost,
Tax, Depreciation & Amortisation) |
3,154 |
22,356 |
5,286 |
36,952 |
| Finance Cost |
843 |
5,979 |
616 |
4,311 |
| Depreciation |
1,237 |
8,766 |
1,075 |
7,514 |
| Profit Before Tax & Exceptional Items |
1,074 |
7,611 |
3,595 |
25,127 |
| Exceptional Items |
(1,595) |
(11,305) |
- |
- |
| Profit Before Tax |
(521) |
(3,694) |
3,595 |
25,127 |
| Tax Provision |
(706) |
(5,007) |
1,178 |
8,233 |
| Profit After Tax |
185 |
1,313 |
2,417 |
16,894 |
| Balance Brought Forward from Last Year |
- |
- |
- |
- |
| Less: Appropriations |
|
|
|
|
| Interim Dividend paid |
550 |
3902 |
1,112 |
7,775 |
| Final Dividend paid |
130 |
918 |
271 |
1,896 |
| Dividend Distribution Tax |
139 |
986 |
284 |
1,985 |
| Insurance Reserve (Net) |
3 |
20 |
3 |
18 |
| Bond Redemption Reserve |
- |
- |
90 |
631 |
| CSR Reserve (Net) |
- |
- |
- |
- |
| General Reserve |
(637) |
(4,513) |
657 |
4,589 |
| Balance Carried to Next Year |
- |
- |
- |
- |
SHAREVALUE
| Particulars |
2019-20 |
2018-19 |
| US$ |
R |
US$ |
R |
| Cash Earnings Per Share |
0.15 |
10.98 |
0.37 |
25.85 |
| Earnings Per Share |
0.02 |
1.43 |
0.26 |
17.89 |
| Book Value Per Share |
1.35 |
102.13 |
1.71 |
118.35 |
Note: Exchange Rate used :-
For 2019-20: Average Rate 1 US$ = R 70.89 and Closing Rate 1 US$ = R
75.67 as on March 31, 2020 For 2018-19: Average Rate 1 US$ = R 69.90 and Closing Rate 1
US$ = R 69.16 as on March 31, 2019
| PHYSICAL |
Million Metric
Tonnes |
| Particulars |
2019-20 |
2018-19 |
| Refineries Throughput |
69.42 |
71.82 |
| Pipelines Throughput |
85.35 |
88.53 |
| Product Sales (inclusive of Gas,
Petrochemicals & Exports) |
89.70 |
89.89 |
The details of macro-economic, geo-political, financial,
industry-specific information affecting the Company's business and the markets in which it
operates are provided in the Management Discussion & Analysis section, which forms
part of the Annual Report.
ISSUE OF SECURITIES / CHANGES IN SHARE CAPITAL
There was no change in the share capital of the Company as well as
issuance of shares during the year. However, during the year, the Company issued
Unsecured, Rated, Listed, Taxable, Redeemable, Non-Convertible Debentures (NCDs)
aggregating Rs 7,995 crore on private placement basis. The funds raised through issuance
of NCDs have been utilised for funding the capital expenditure, including recoupment of
expenditure already incurred.
DISINVESTMENT BY THE PRESIDENT OF INDIA (PROMOTER)
The promoter of the Company, i.e., the President of India, was holding
491,21,49,459 equity shares, constituting 52.18% of the total equity share capital, as on
April 1, 2019. As part of the Government's disinvestment programme, the President, acting
through the MoP&NG, disinvested 6,40,16,281 shares during July 2019 in favour of CPSE
ETF (an exchange traded fund comprising 11 stocks managed by Reliance Nippon Life Asset
Management Company). Thereby, the holding of the President of India got reduced to
484,81,33,178 equity shares, constituting 51.50% of the paid-up equity share capital of
the Company.
DIVIDEND
The Company paid an interim dividend of ^ 4.25 per share during
2019-20. This is the 53rd consecutive year for which the Company has paid
dividend. So far, the Company has paid a cumulative dividend of ^ 63,920 crore. The Board
of the Company has formulated a Dividend Distribution Policy and the dividends declared /
recommended during the year are in accordance with the said policy. The policy is annexed
to the Directors' Report at Annexure-I and is also hosted on the website of the Company,
i.e., www.iocl.com
CONTRIBUTION TO EXCHEQUER
Over the years, the Company has been the largest contributor to the
Government exchequer in the form of duties, taxes and dividend. During the year, Rs
1,82,067 crore
was paid to the exchequer as against Rs 1,93,422 crore paid in the
previous year. An amount of ^ 96,104 crore was paid to the Central Exchequer and Rs 85,963
crore to the States Exchequer as against ^ 1,01,395 crore and ^ 92,027 crore paid in the
previous year 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, the
Company has prepared the Consolidated Financial Statement for the group, including
subsidiaries, joint venture entities and associates. The highlights of the Consolidated
Financial Results are as follows:
|
2019-20 |
2018-19 |
| Particulars |
US$ Million |
Rs in Crore |
US$ Million |
Rs in Crore |
| Revenue from Operations (Inclusive of Excise
Duty & Sale of Services) |
81,336 |
5,76,589 |
88,305 |
6,17,251 |
| Profit Before Tax |
(1,012) |
(7,177) |
3,709 |
25,927 |
| Profit After Tax |
(265) |
(1,876) |
2,471 |
17,274 |
| Less: Share of Minority |
(139) |
(983) |
(15) |
(103) |
| Profit for the Group |
(126) |
(893) |
2,486 |
17,377 |
Note: Exchange Rate used:-
For 2019-20: Average Rate 1 US$ = ^ 70.89
For 2018-19: Average Rate 1 US$ = ^ 69.90
OPERATIONAL PERFORMANCE Refineries
The year 2019-20 was the year in which all the refineries of the
Company achieved BS-VI fuels (MS & HSD) upgradation. During the year, the nine
refineries of the Company achieved a throughput of 69.42 MMT equivalent to 100.32% of
installed capacity.
The performance on parameters like capacity utilisation, distillate
yield and energy performance was slightly lower as compared to the previous year due to
shutdown of refineries for implementation of BS-VI projects.
During the year, Digboi Refinery was the first refinery to produce
& supply BS-VI compliant fuels in August 2019 using indigenously developed R&D
Catalyst. Mathura Refinery upgraded to the BS-VI club in January 2020 along with Panipat,
Gujarat, Haldia and Bongaigaon Refineries in February 2020. This was followed by the other
remaining refineries going BS-VI, producing the upgraded fuel which was made available
through the Company's retail outlets across the country w.e.f. March 16, 2020, ahead of
April 1, 2020, the deadline stipulated by the Government of India.
During the year, six new crude oil grades were included in the crude
oil basket of the Company, taking their number to 186, to improve flexibility in refinery
operations / crude purchases.
Delivering greatest value across its spectrum of customers has been the
motto of IndianOil. The Company was the first in the country to supply bunker fuel with
new specifications mandated by the International Maritime Organisation from its Gujarat
Refinery in September 2019, followed by Haldia Refinery in November 2019. The other major
achievements include production of BS-VI compliant winter-grade High Speed Diesel (HSD)
from Panipat Refinery in November 2019, capable of withstanding extremely low temperatures
in winter of -33oC in the Himalayan region and supply of
NATO-grade HFHSD (High Flash HSD) for the Indian Navy from Paradip & Haldia
refineries.
To support the national commitment of achieving climate change goals
and a 10% reduction in the oil import bill by the year 2022, the Company has joined hands
with Oil and Natural Gas Corporation Limited (ONGC) and Oil India Ltd. (OIL) for carbon
capture, utilisation & storage projects. MoUs were signed with ONGC and OIL during the
year which entails capturing carbon dioxide from refinery stacks at Gujarat & Digboi
and supplying it to the depleting oil fields of these companies for enhanced oil recovery
(EOR). For carrying out the feasibility study, an aid of USD 1 million has been sanctioned
by USTDA.
With long term energy demands in horizon, Barauni Refinery will also
witness expansion from current installed capacity of 6 MMTPA to 9 MMTPA at an estimated
project cost of ^ 14,000 crore, as a part of the company's capacity augmentation plans.
With the ethos of Make in India in perspective and to address the
ever-increasing demand of butyl acrylate, a largely imported petrochemical in India, the
Company is also putting in place an Acrylics / Oxo-Alcohol Project at Dumad, Gujarat at an
estimated cost of ^ 4500 crore. The key end user applications of Butyl Acrylate being
adhesives, paints & coatings, textile chemicals, synthetic tanning agent/leather
chemicals.
Pipelines
The robust logistics network of the Company is strengthened by its
formidable network of pipelines transporting crude oil to its refineries and finished
products to high-consumption centres across the length and breadth of the country. The
extensive network was further expanded by 438 km during the year to span more than 14,670
km, with a combined throughput capacity of 94.56 million tonnes per annum for crude oil /
product and
21.69 MMSCMD (million metric standard cubic metres per day) for gas
pipelines.
The Product pipelines recorded the highest ever throughput of 37.92 MMT
as against 37.20 MMT achieved during the previous year, registering a growth of 1.9%. The
gas pipelines also achieved the highest ever throughput of 2,400 MMSCM during the year, as
against a throughput of 1834 MMSCM in 2018-19.
The Company commissioned the Motihari - Amlekhganj products pipeline,
the first transnational pipeline of the country, in July, 2019, eight months ahead of the
schedule. The pipeline has enabled supply of petroleum products to Nepal in a safe and
cost-efficient manner.
For the first time in India, the first batch of 10% ethanol - blended
petrol was pumped through the Mathura - Tundla pipeline in April, 2019. Subsequently, the
same was carried out in the Mathura - Delhi pipeline in October, 2019 and in Mathura
-Bharatpur pipeline in February, 2020.
Marketing
The Company has the largest share towards meeting the domestic
petroleum product demand of India that leverages its behemoth customer base catered to by
its ever expanding touchpoints. The Company achieved domestic sales of 78.54 MMT of
petroleum products during the year, with footfall of 2 crore per day at retail outlets and
delivery of 25 lacs LPG cylinders per day, as against 79.45 MMT in the previous year,
registering a drop of 1.1% mainly due to the countrywide lockdown in March 2020 leading to
a significant drop in overall sales.
The Company continued to meet the fuel requirements of the defence
services and the railways during the year. In order to ensure uninterrupted availability
of petroleum products in Leh & Ladakh during the winter season, when the region gets
cut-off from the rest of the country, the Company successfully completed the Advance
Winter Stocking exercise well before the closure of roads.
During the year, the country's first Compressed Bio-Gas dispensing
station was commissioned by the Company in Pune, followed by another station in Kolhapur.
As a part of the Company's plan to foray into alternative energy segment, 54 battery
charging / swapping stations were also set up in partnership with various companies.
To cater to the rising fuel demand, the Company commissioned new
state-of-the-art automated bulk storage terminals at Una (Himachal Pradesh) and Doimukh
(Arunachal Pradesh) during the year. In addition, new LPG bottling plants were
commissioned at Bhatinda (Punjab), Banka (Bihar) and Tirunelveli (Tamil Nadu) to improve
turnaround of LPG cylinders.
During the year, the Company released more than 75 lakh LPG
connections, of which 41 lakh connections were released under Pradhan Mantri Ujjwala
Yojana (PMUY) to women from poor households. The target of releasing 8 crore LPG
connections on industry basis under PMUY was achieved in September 2019, seven months
ahead of the
targeted timeline. Out of the 8 crore PMUY connections, the Company has
released 3.75 crore connections.
The Company also commissioned 524 new LPG distributorships, taking
their total number to 12,450. The Company achieved the highest ever annual sale of 12.33
MMT of LPG during the year.
SERVO, the lubricant brand of the Company, continued to be the market
leader in finished lubricants segment with sale of 407 Thousand Metric Tonnes (TMT) during
the year. 110 SERVO grade approvals were obtained from Original Equipment Manufacturers
(OEMs) like Tata Motors, Mahindra & Mahindra, KIA Motors, Nissan, Honda, etc., during
the year. With the appointment of lubricant distributors in four new countries, i.e.,
Myanmar, Indonesia,
Qatar and Vietnam, SERVO exports increased by 12.7% during the year.
The Aviation Service of the Company continued to maintain its
leadership position with a market share of 63.8% during the year. With the commissioning
of four new Aviation Fuel Stations (AFS), the Company is now providing aircraft refuelling
services at 119 airports in the country. The Company continued to be the reliable fuel
supplier of Indian Air Force during the relief operations carried out during natural
calamities.
The Cryogenics group of the company sold 33,000 units of cryo-cans and
cryo-vessels during 2019-20, as against the previous year's sale of 29,555 units,
registering a growth of 13%. During the year, the Cryogenics group also fabricated 16
aviation refuellers.
Research & Development
The R&D Centre of the Company, a pan industry recognized
institution of innovation and technology development, consolidated its strengths and
explored new avenues of collaboration with several reputed institutions to pursue research
in diverse areas during the year. Cutting-edge solutions from the R&D Centre continued
to flow into core areas like lubricants, catalysts, fuels & additives, petrochemicals
& polymers, alternative energy, etc.
The first ever overseas agreement to licence the flagship INDMAX
technology of the R&D Centre was concluded during the year with the licencing partner
- Lummus Technology Inc. of USA - signing the agreement with Serbia's Naftna Industrija
Srbije (NIS). INDMAX technology will be used in the FCC modernisation project of NIS's
refinery at Pancevo for enhanced production of valuable olefins and high-octane naphtha.
This will open up new vistas for this indigenously developed technology to expand its
footprints.
AmyleMax, an in-house octane-boosting technology, was successfully
validated at the Company's Gujarat Refinery. The entire process scheme & design, cost
estimation, catalyst supply, preparation of BDEP and implementation at site were carried
out in-house from concept to commercialisation in a record time of 11 months. This
technology was adjudged as the best refinery process innovation by the Ministry of
Petroleum and Natural Gas, Govt. of India.
A Hydrogen-CNG (H-CNG) demonstration plant of 4 tonnes/ day capacity
based on R&D patented compact reforming technology has been set up at Rajghat bus
depot in New Delhi. On-road trials of H-CNG fuel in 50 identified city CNG buses is to
commence soon.
During the year, 133 lubricant formulations were developed, of which
112 were commercialised. 66 approvals were also received from Original Equipment
Manufacturers (OEMs) during the year.
The R&D Centre filed for 128 patents (37 Indian and 91 overseas)
and was granted 123 patents during the year, taking the tally of active patents to 929.
BUSINESS DEVELOPMENT
The Company has nurtured many new ideas and added new business lines
over the years to complement its core business of refining and marketing of petroleum
products. Considering the wide-ranging changes that impact the energy sector, constant
efforts are on for diversification of business as well as upstream and downstream
integration. The Company has made considerable progress in Petrochemicals, Natural Gas
sourcing and marketing, Exploration & Production, Alternative Energy and Overseas
Business, which are becoming key sources of innovation, strength and sustained growth.
Petrochemicals
The Company's offerings in petrochemical segment include Polymers,
Linear Alkyl Benzene, Purified Terephthalic Acid, Glycols and Butadiene. The PROPEL brand
of the Company is now a leading brand in the Indian petrochemicals market. During the year
2019-20, petrochemicals sales, including exports, was 2.29 MMT as against 2.64 MMT in the
previous year. The fall in sales as compared to last year was due to planned turnarounds
and unplanned outage of a few units. In addition, towards the end of the year, COVID-19
crisis also weighed in on the demand.
The Product Application Development Centre (PADC) at Panipat continues
to be a major driver of competitive advantage for the Company's petrochemicals business. A
new PADC has been made operational at Paradip for carrying out quality assurance testing
of grades manufactured at Paradip as well as to extend technical support to downstream
customers. During the year, the Company received approvals from 15 major Indian and
international original equipment manufacturers for its various polymer grades.
A major milestone was the commissioning of the 700- KTA Polypropylene
(PP) plant at Paradip in July 2019. Seven grades were introduced from this plant, which
soon became well established in the market.
Natural Gas
The Re-gasified Liquefied Natural Gas (RLNG) is also gaining momentum
as an important energy delivery pathway of the company. During the year, the Company's
natural gas sales (including internal consumption) grew by 19% to touch
5.42 MMT as against 4.56 MMT in 201819. This includes 0.45 MMT from the Ennore LNG import
terminal commissioned in March 2019. The Company now has a customer base of over 60 R-LNG
customers besides supplies to its own refineries at Mathura, Panipat and Koyali. A major
scale-up was witnessed in sales through the Company's ‘LNG at the Doorstep' segment,
which achieved a level of 8.73 TMT, with a rise of 132% over the previous year.
The Company has in the recent years been making significant headway in
the City Gas Distribution (CGD) business and now has a standalone presence in 17
Geographical Areas (GAs). In addition, the Company has 23 GAs in its fold through two
joint venture companies, namely Green Gas Ltd. (with GAIL India Ltd.) & IndianOil
Adani Gas Pvt. Ltd. (with Adani Gas Ltd.).
The Company is making major investments in building the natural gas
infrastructure in the country and is in the process of developing three cross-country gas
pipelines
i.e. Mehsana - Bhatinda, Bhatinda - Jammu - Srinagar & Mallavaram
-Bhopal -Bhilwara -Vijaipur pipelines, through two joint ventures, viz., GSPL India Gasnet
Ltd. & GSPL India Transco Ltd., wherein Gujarat State Petronet Ltd., Bharat Petroleum
Corp. Ltd., and Hindustan Petroleum Corp. Ltd. are its partners.
The Company is also implementing a 1,656 km natural gas pipeline grid
in the northeast through Indradhanush Gas Grid Ltd., a JVC with ONGC Ltd., Oil India Ltd.,
GAIL (India) Ltd. and Numaligarh Refinery Ltd. The Cabinet Committee on Economic Affairs
has in January 2020, approved viability gap funding of 60% of the estimated cost of ^
9,265 crore for this project.
LNG imports by the Company rose by 22% during the year with direct
import of 32 LNG cargoes, which included 27 spot cargoes, 2 cargoes from Cameron Project,
USA, and 3 from Ras Laffan LNG Co., Qatar, against long-term contracts.
Exploration & Production (E&P)
The Company continued its endeavour in E&P activities through
participating interests (PI), joint ventures and wholly-owned subsidiaries. Its upstream
portfolio consists of 12 domestic and 12 overseas assets, which are in various stages -
exploration, development and production. The major developments in the E&P business
segment were approval of Declaration of Commerciality for the gas discovery in Gujarat -
Kutch Offshore by the Director General of Hydrocarbons in August 2019, grant of Petroleum
Mining License by the Govt. of Assam in Umatara Cluster (Assam), where the Company is the
Lead Operator with 90% PI, commencement of Gas Sales from Coal-Bed Methane Block in
Jharkhand, and award of three domestic exploration assets under the Open Acreage Licencing
Policy (OALP) Round -I and Round -II.
Alternative Energy
A hallmark of it's clean energy agenda, the Company exhibits an
installed capacity of 226 MW of renewable energy, including 168 MW wind-power capacity and
58 MW solar energy capacity as on March 31, 2020, with addition of 10 MW solar
photo-voltaic capacity during the year. These projects generated 393 million units of
power (equivalent to about 5% of the Company's electricity consumption) during 2019-20,
resulting in emission mitigation of 322 thousand metric tonnes of carbon-dioxide
equivalent.
The Company took a significant step in promoting use of bio-fuels in
the country during the year with the commencement of sale of Compressed Bio-Gas (CBG)
under the Sustainable Alternative Towards Affordable
Transportation (SATAT) scheme of the Government of India. CBG is being
sold through one retail outlet each in Pune and Kolhapur in Maharashtra from September
2019, under the brand name IndiGreen. The Company has also issued Letters of Intent (LOIs)
to entrepreneurs for setting up 295 CBG plants across the country for production of 0.6
MMTPA of CBG under the SATAT scheme.
The Company is putting up a second - generation Ethanol plant at
Panipat to produce 100 kl per day of Bio-Ethanol with paddy straw as feedstock. In
addition, a Bio-fuels Complex is being developed at Gorakhpur comprising a CBG plant that
will process 200 tonnes per day of feedstock. The Company is also working on converting
used cooking oil (UCO) to bio-diesel, against which LOIs have been issued to interested
entrepreneurs for setting
up seven plants with an annual cumulative capacity of 12.16 crore
litres of bio-diesel from UCO.
In the field of electric mobility, the Company has signed MoUs with
potential partners for setting up charging and battery swapping stations. As on March 31,
2020, 54 battery charging / swapping stations have been installed at its various retail
outlets. The Company has also taken a minority stake in Phinergy Ltd. of Israel with the
intention of setting up Aluminium-Air battery manufacturing facility in India for electric
vehicles and stationary applications, through the joint venture route.
Sustainable Development
Sustainable development is one of the thrust areas of the Company to
address the issue of climate change and to do business in an environmentally benign way.
As part of this, the Company has been pursuing energy conservation, energy efficiency,
renewable energy & carbon sequestration; water management through reducing
consumption, recycling & rain-water harvesting; and waste management through reducing,
reusing & recycling initiatives.
The Company is replacing all conventional lighting with LED lights
across its installations, and during the year around 1.5 lakh LED lights were installed
with a cumulative replacement count of more than 6 lakh LED lights. Waste paper recycling
is a major initiative of the Company and during the year, 203 tonnes of waste paper was
recycled through designated recyclers. Across the Company, 683 rain-water harvesting
systems have been installed, which together harvested 3.75 billion litres of water in
201920. Besides, 1.96 lakh saplings were planted at various
locations across the country.
The Mathura and Gujarat refineries of the Company have committed to use
treated municipal sewage water for refinery operations. With this initiative, the sewage
water, which is being discharged in the river, will be used for industrial purposes, thus
eliminating the use of fresh water.
The Company's performance on various sustainability parameters is
reported in the Annual Sustainability Report, which is being published regularly since
2005-06.
Overseas Business
The Company has been constantly exploring opportunities in Oil, Gas and
Petrochemicals sectors overseas with focus on countries in the SAARC, ASEAN, Middle East,
Central Asia and Africa regions. A Representative Office was opened in Kathmandu, Nepal,
in August 2019 with the intention of providing improved service and enhanced presence in
the downstream hydrocarbon sector in that country. MoUs were also signed during the year
with counter-parties in Myanmar, Thailand and Ghana for exploring business opportunities
in the areas of refining, retail, lubes and LPG, among others.
A major initiative in leveraging the synergies with the hydrocarbon
sectors of neighbouring countries was the commencement of import of bulk LPG by road from
Bangladesh to the LPG bottling plant in Bishalgarh (Tripura). Transporting LPG by road
from Bangladesh to North-east India ensures easier logistics by way of a shorter route.
An agreement was signed by the Company's wholly-owned subsidiary (WOS),
IOC Middle East FZE, Dubai, UAE, with Qatrat Naft LLC, a WOS of Al-Jeri Transportation
Co., Saudi Arabia, for the formation of a joint venture company to develop and operate a
retail network in Saudi Arabia.
Explosives
The Explosives group manufactured and sold 205 TMT of explosives during
the year, recording a growth of 12% over the previous year's volume of 183 TMT.
INTERNATIONAL TRADE
In order to meet the crude oil requirement of its refineries, the
Company imported 59.75 MMT of crude oil during the year, as against 61.69 MMT in the
previous year. The selection of crude oil is done from a diversified mix of supply
sources. The import of petroleum products during the year was 8.57 MMT as against 7.00 MMT
in the previous year. The Company has made alternative arrangements for sourcing of crude
oil, including term contracts for US- origin crudes, to maintain uninterrupted operations
at its refineries and to overcome the crude oil supply concerns due to disruptions in
crude oil - producing countries. The Company entered into a term contract with Rosneft Oil
Company, Russia, for import of Urals crude oil during the period February -December 2020.
INFORMATION SYSTEMS & OPTIMISATION
During the year, the first leg of service management of customer-facing
ePIC portal was launched. All service requests and grievance resolution activities across
various
lines of business were brought on to the platform, resulting in
significant improvement in single-day resolution of service requests. The Secondary Dealer
Management System / Customer Relationship Management initiative has now been rolled out to
10,800+ LPG Distributors with new channels of refill bookings through WhatsApp and PayTM,
digital payment channels i.e. credit / debit cards, wallets, quick-pay links and
redemption of XtraRewards loyalty programme with PayTM mobile app.
The Company is the first corporate in India to integrate its SAP ERP
system with TReDS, an e-discounting platform to support MSMEs. Other significant
implementations include Traders and Scheduling Workbench (TSW) for end-to-end visibility
of gas supply chain, interface with online portal GeM, Reverse Auction module in GePNIC
and Enterprise Content Management System for business workflow automation.
In continuation of the Company's commitment towards security of
customer data in electronic format, a comprehensive Data Privacy Policy was released. A
premier cyber-security agency of GoI, C-DAC, was engaged to assess and help strengthen the
security posture of the Company.
During the year, an integrated logistics SAND model combining primary
(refineries to terminals / depots) & secondary (terminals / depots to retail outlets)
logistics was developed and implemented for leveraging different logistics capabilities to
arrive at optimum distribution from refineries to retail outlets. In addition, a Parallel
Solve Automation programme was developed and implemented, which enables evaluation of
around 2,000 crude oil cases in 3-4 hours against the earlier cycle of 30-36 hours.
Pipeline scheduling software implementation was commenced in September 2019 and completed
for one crude oil pipeline and four product pipelines, and is being rolled out at all the
remaining pipelines shortly.
HEALTH, SAFETY & ENVIRONMENT (HSE)
The Company is committed to conducting its business with a strong
environment conscience, ensuring sustainable development, safe work-places and enrichment
of the quality of life of its employees, customers and the community. All refineries of
the Company 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.
A majority of the pipeline installations and some of the marketing
installations of the Company are also ISO-14001 certified. Compliance with safety systems
& procedures and environmental laws is monitored at the unit, division and corporate
levels.
The HSE activities of the Company are reviewed periodically during
Board meetings. During the year, safety audits were carried out at various offices and
locations, and various training programmes were conducted on safety- related topics
covering the entire spectrum of activities of the Company. The HSE group also conducts
road safety campaigns, which also includes free eye check-up of truck drivers and
distribution of free spectacles and eye surgeries, wherever required.
HUMAN RESOURCES
The Company has a strong and dedicated workforce of 32,998, consisting
of 17,977 executives and 15,021 nonexecutives as on March 31, 2020, including 2,871 women
employees comprising 8.70% of the total workforce. During the year, the Company recruited
898 executives (including 7 under sports category) adding agility to the team behind the
Company's all-round growth. In order to further the cause of apprenticeship training in
the country, the Company engaged apprentices under various categories like Trade /
Technician / Fresher / Skill-certificate holder. The apprentices were imparted practical
inputs with a structured monitoring and assessment methodology.
The Company scrupulously follows the Presidential Directives and
guidelines issued by the Government of India regarding reservation in services for SC / ST
/ OBC / PwBD (Persons with Benchmark Disabilities) / Exservicemen / Economically Weaker
Sections (EWSs) to promote inclusive growth. Rosters are maintained as per the directives
and are regularly inspected by the Liaison Officer(s) of the Company 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 level for registering
grievances from OBC / SC / ST employees and efforts are made to promptly dispose of the
representations / grievances received. 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.
The provisions of 4% reservation for Persons with Disabilities in line
with guidelines / instructions issued by the Government of India are implemented by the
Company. Necessary concessions / relaxations in accordance with the rules in this regard
are extended to physically challenged persons in recruitment. The number of employees with
disabilities as on March 31, 2020 was 706, constituting 2.14% of the total employee
strength.
The Company continued to maintain cordial industrial relations during
the year. The Company provides 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. The Company supports 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.
The inherent belief of the Company is that holistic and meaningful
employee engagement and their right development will catalyse the emergence of the highest
potential of employees. With focus on aligning various HR initiatives with Strategic
Corporate Vision, many new initiatives were taken during the year, aimed at both employee
engagement and making our people ‘future ready'. The Company endeavours to build
happy teams of internal customers across the organisation based on empathy and emotional
ownership and is continuously calibrating its HR strategy on the cornerstones of its core
corporate values of Care, Innovation, Passion and Trust.
The Company launched a Technical Competency Framework (TCF) during the
year. The TCF lays the foundation of a technology-aided e-learning platform Swadhyaya,
launched on IndianOil Day i.e. September 1, 2019, which has spurred a learning revolution
in the organisation. The entire content has been developed by
in-house subject matter experts. More than 600 modules covering about
70 functions were made available on the platform and more content is being added on
continuous basis. In all, the employees have completed over 6 Lakh modules.
Hindi Implementation
The Company is committed to implementation of Hindi in day-to-day
functioning at its various offices / locations / units. The provisions of Official
Language Act, 1963 and Rules notified thereunder are complied with. Communications
received in Hindi and any application, appeal or representation written or signed by an
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 of
official language policies.
RIGHT TO INFORMATION ACT
An elaborate mechanism has been set up throughout the Company to deal
with matters relating to The Right to Information Act 2005. As required under the RTI Act,
detailed information is hosted and regularly updated on the official website of the
Company, i.e., www.iocl.com which inter-alia includes details of CPIOs / APIOs, third-
party audited reports on mandatory disclosures, etc.
The Company has aligned with the online RTI portal launched by DoPT,
Govt. of India, and all the applications / appeals received through the portal are
disposed off through the portal only. The Quarterly Reports / Annual Reports are
submitted, within the prescribed timeline, on the website of Central Information
Commission, i.e., www.cic.gov.in
A total of 6,614 requests and 757 first appeals were received during
the year and were disposed off within the prescribed timelines. In addition, 88 second
appeals were filed before the Central Information Commission, New Delhi, and all were
disposed off without any penalty / 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 the
Company with the clear objective of providing protection to women against sexual
harassment at the workplace and redressal of complaints of sexual harassment. Internal
committees have been set up at each and every Unit / Region / Head Office level, headed by
senior-level women employee to deal with sexual harassment complaints, if any.
Five complaints of sexual harassment were pending as on April 1, 2019.
During the year 2019-20, six complaints were received and five complaints were disposed
of. As on March 31, 2020, six complaints were pending.
Regular workshops are being organised, especially for women employees,
with the objective to bring awareness
about their rights and facilities at workplace and emphasizing the
provisions of the Act. During the year, 45 workshops / awareness programmes were
conducted. Gender sensitisation programmes, sensitising the male employees, are also being
conducted regularly.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has been actively engaged in various CSR activities over
the years, encompassing the entire gamut of social welfare / upliftment activities across
the nation. The Company lays significant emphasis on development of communities around
which it operates and has identified thrust areas under CSR, which inter- alia include
healthcare and sanitation, education and employment-enhancing vocational skills,
empowerment of women and socially / economically backward groups, etc. During the year,
the Company spent the entire budget of ^ 543.38 crore on various CSR activities. A report
on the Company's CSR activities as per the provisions of the Companies Act alongwith CSR
highlights for the year is annexed at Annexure - III to the report. The composition of the
CSR Committee is provided in the Corporate Governance Report. The CSR policy of the
Company can be accessed at the website of the Company on the link
https://iocl.com/aboutus/Ioc_S&CSR_policy.pdf
VIGILANCE
The objective of the vigilance function is to ensure maintenance of the
highest level of integrity throughout the Company. The Vigilance department not only acts
as a link between the organisation and Chief Vigilance Commissioner but also advises the
organisation in all matters pertaining to Vigilance. The Vigilance department takes
preventive, punitive and participative measures, with emphasis on the preventive and
participative aspects, and also helps in establishing effective internal control systems
and procedures for minimising systemic failures. During the year, 81 vigilance awareness
programmes
were conducted, which were attended by about 2,500 employees.
Disciplinary action under applicable Conduct, Discipline and Appeal
Rules, 1980 and Certified Standing Orders are taken by the Company for irregularities /
lapses. During the year, 53 disciplinary matters related to vigilance cases were disposed
off and 21 such cases were pending at the end of year. The aforesaid cases pertain to
irregularities such as indiscipline, dishonesty, negligence in performance of duty or
neglect of work, etc. The Company 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 Company was closed with effect from
August 31, 2009. The Company has not invited any deposits from the public during the year
and no deposits are outstanding as on March 31, 2020 except the old cases amounting to ^
55,000/-, which remain unpaid due to unsettled legal / court cases.
CORPORATE GOVERNANCE
The Corporate Governance Report highlighting the endeavours of the
Company 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 the Company 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.
The details of other Board Committees, their composition, meetings
etc., are provided in the Corporate Governance Report.
CODE OFCONDUCT
The Board of the Company 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 Company's website. The Directors and Senior Management
Personnel have affirmed compliance with the code of conduct for the financial year
2019-20.
RISK MANAGEMENT
The Company considers risk management as a key element of its business
operations and has put in place effective systems to identify, analyse, monitor and
mitigate risks to ensure the organisation's sustained growth and profitability. The
Company's Enterprise Risk Management involves risk identification, assessment and
categorisation (based on risk appetite) and is reviewed regularly by risk- owners to
optimise risks with appropriate mitigation plan.
A Risk Management Compliance Board comprising senior management
personnel and headed by Chief Risk Officer reviews the various risks associated with the
Company's business. The Company has constituted a Risk Management Committee comprising
whole-time Directors that oversees risk management activities. A report is, thereafter,
put up to the Audit Committee and the Board.
INTERNAL FINANCIAL CONTROLS
The Company has put in place adequate internal financial controls for
ensuring efficient conduct of its business in adherence with laid-down policies;
safeguarding of its assets; prevention and detection of frauds and errors; accuracy and
completeness of the accounting records; and timely preparation of reliable financial
information, which is commensurate with the operations of the Company. The Company 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 over financial reporting of the Company under Clause (i) of SubSection
3 of Section 143 of the Companies Act 2013. The report issued thereupon has been attached
along with the Standalone and Consolidated Financial Statements respectively. During the
year, Internal Financial Control (IFC) processes were reviewed and majorly revamped where
Risk Control Matrix (RCM) for all the major areas are reviewed with respect to changes due
to business process enhancement, regulatory developments, centralisations, etc.
REMUNERATION TO THE AUDITORS
The Office of the Comptroller & Auditor General of India had
appointed the Statutory Auditors for the financial year 2019-20. The Auditors'
remuneration for the year was fixed at ^ 200 lakh plus applicable taxes for Statutory
Audit. In addition, reasonable out-of-pocket expenses incurred are also reimbursed at
actuals. The total amount payable to the Statutory Auditors for all services rendered by
them to the Company during 2019-20 was ^ 427 lakh.
COST AUDIT REPORT
The Company maintains cost records as required under the provisions of
the Companies Act. The Company had appointed Cost Auditors for conducting the audit of the
cost records maintained by its refineries, lube blending plants and other units for the
year 2019-20. A remuneration of ^ 20.20 lakh and applicable taxes was fixed by the Board
for payment to the cost auditors for the year 2019-20, which was ratified by the
shareholders in the last AGM. The cost audit for the year 2018-19 was carried out for
various units of the Company 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 2019-20 would also be filed within the stipulated time.
SECRETARIAL AUDIT
The Secretarial Audit Report for the year 2019-20 confirms that the
Company has complied with the applicable provisions of the corporate laws, guidelines,
rules, etc., which are within the purview of the Company. The report, duly certified by
the Secretarial Auditor, M/s. Ragini Chokshi & Co., Practising Company Secretaries, is
attached at Annexure -IV to this report.
The Secretarial Auditor has made an observation that the Company did
not comply with the requirements with regard to appointment of Woman Independent Director
on its Board for the period April 1, 2019 to November 5, 2019 as well as did not have the
requisite number of Independent Directors on its Board for the period April 1, 2019 to
November 5, 2019 & December 2, 2019 to March 31, 2020. In this regard, it is clarified
that the Company 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.
REPORTING OF FRAUDS BY AUDITORS
The Auditors in their report for the year have not reported any
instance of fraud committed by the officers/employees of the Company.
PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES (MSEs) ORDER
2012
In line with the Public Procurement Policy of the Government of India,
as amended, the Company is required to procure minimum 25% of the total procurement of
Goods and Services from MSEs, out of which 4% is earmarked for procurement from MSEs owned
by SC / ST entrepreneurs and 3% from MSEs owned by women. The procurement from MSEs
(excluding crude oil, petroleum products & natural gas, API line pipes and certain
proprietary items) during 2019-20 was as under:
| Parameters |
Targets |
Actual |
| Total Procurement from |
|
|
| MSEs (General, Reserved SC/ST & Women) |
25% |
27.51% |
| Procurement from Reserved SC/ST MSEs |
4% (Sub-target out of 25%) |
0.47% |
| Procurement from Women- owned MSEs |
3% (Sub-target out of 25%) |
0.03% |
The deficit of 3.53% and 2.97% under the sub-targets was due to
non-availability of vendors in the sub-category; however, the overall target was achieved
by procurement from other micro and small enterprises in line with the policy.
Several initiatives were undertaken to identify the entrepreneurs for
procurement of goods and services from MSEs owned by SC / ST enterprises by way of
conducting vendor development programmes.
SUBSIDIARIES, JOINT VENTURES & ASSOCIATES
During the year, a new Joint Venture Company, viz., IHB Private
Limited, between the Company, Bharat Petroleum Corporation Limited and Hindustan Petroleum
Corporation Limited was incorporated in July, 2019 for the purpose of laying, building,
operating or expanding an LPG pipeline from Kandla (Gujarat) to Gorakhpur (UP). The equity
holding of the Company in the JV is 50% while the remaining 50% is held by other partners
equally.
As required under the provisions of the Companies Act, 2013, a
statement on the performance and financial position of each of the subsidiaries, joint
venture companies and associates 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 Company, i.e., www.iocl.com under ‘Financial Performance' section.
In accordance with the provisions of the SEBI guidelines, the Company
has framed a policy for determining material subsidiaries, which can be accessed on the
Company'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 & SEBI
guidelines, a policy on material RPTs has been framed, which can be accessed on the link
https://www.iocl.com/ InvestorCenter/Policy_on_related_party_transactions.pdf The Company
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, was 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.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
The Company recognises energy conservation as one of the most important
parameter amongst various operating parameters and accords high importance to the same at
all its refineries and operating units. The performance of units is monitored on a
continuous basis and efforts are made
for continuous improvement by incorporating the latest technologies and
global best practices. As a result of various energy conservation measures undertaken
during the year, the energy performance parameter (indexed to the complexity of
operations) in terms of MBN* of the refineries was 71.9, as against 71.3 in the previous
year. Under pipeline operations, various initiatives were taken during 2019-20, which
resulted in improvement of Specific Energy Consumption of Pipelines by 4.10%.
In accordance with the provisions of the Companies Act, 2013 and rules
notified thereunder, the details relating to Energy Conservation, Technology Absorption
and Foreign Exchange Earnings and Outgo are annexed at Annexure -VI to the report.
*MBN-(MBTU/BBL/NRGF) is calculated as Thousand British Thermal Units
per Barrel per Energy Factor.
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 Company:-
Appointments
1. Shri Rajendra Arlekar was appointed as Independent Director w.e.f.
July 24, 2019
2. Shri Sandeep Kumar Gupta was appointed as Director (Finance) w.e.f.
August 3, 2019.
3. Shri S.M. Vaidya was appointed as Director (Refineries) w.e.f.
October 14, 2019 and was subsequently designated as Chairman w.e.f. July 1, 2020.
4. Ms. Lata Usendi was appointed as Independent Director w.e.f.
November 6, 2019
5. Dr. Navneet Mohan Kothari was appointed as Government Nominee
Director w.e.f. March 25, 2020.
Cessations
6. Shri B.V. Ramagopal ceased to be Director (Refineries) w.e.f. August
1, 2019 consequent upon his superannuation.
7. Shri Ashutosh Jindal, Government Nominee Director, ceased to be
Director w.e.f. November 4, 2019.
8. Shri Parindu Bhagat ceased to be Independent Director w.e.f.
December 2, 2019 consequent upon completion of his term.
9. Shri Ashish Chatterjee, Government Nominee Director, was appointed
on December 12, 2019 and ceased to be Director w.e.f. March 25, 2020.
10. Shri Sanjiv Singh ceased to be the Chairman w.e.f. July 1, 2020
consequent upon his superannuation.
Shri G.K. Satish, Director (P&BD) and Shri Gurmeet Singh, Director
(Marketing), are liable to retire by rotation and being eligible are 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.
INDEPENDENT DIRECTORS
The Company has received the Certificate 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 (SEBI (LODR)). The Independent Directors
have also confirmed that they have registered with the Database maintained by the
Institute of Corporate Affairs under the Ministry of Corporate Affairs.
The Company being a Government Company, the power to appoint Directors
(including Independent Directors) vests with the Govt. of India. The Directors are
appointed by following a process as per laid down guidelines. In the opinion of the Board,
the Independent Directors have the requisite expertise and experience. As regards the
proficiency is concerned, some of the Independent Directors have already cleared the
online proficiency selfassessment test as prescribed by the Institute of Corporate Affairs
while the other Independent Directors are in the process of completing the test.
A separate meeting of Independent Directors was held during the year as
per provisions of the Companies Act, 2013 and SEBI (LODR).
BOARD MEETINGS
During the year, 11 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 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 the
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 qualifications, 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, during the year that impact the going concern status of the Company
and its operations in the future. The response to the notice issued by the National Green
Tribunal and Haryana State Pollution Control Board last year, with regard to air and water
pollution caused by the PTA Unit of Panipat Refinery was provided by the Company. However,
as directed by NGT, an amount of ^ 17.31 crore was deposited ‘under protest' with
CPCB as interim compensation for restoration of the environment. Since then the plant
operations recommenced. The NGT, while considering the report of the Joint Committee
formed by it earlier, has directed on July 24, 2020, that an additional compensation of ^
25 crore be deposited with CPCB within one month and various initiatives as suggested by
the Joint Committee be expedited within next 6 months. Further hearing as well as the
final order in the matter is awaited.
VIGIL MECHANISM / WHISTLE-BLOWER POLICY
The Company 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. No employee
has been denied access to the Audit Committee. The policy on Vigil Mechanism /
Whistle-Blower can be accessed on the Company's website at the link
https://www.iocl.com/InvestorCenter/ Whistle_Blower_policy.pdf
DETAILS OF LOANS / INVESTMENTS / GUARANTEES
The Company has provided loans / guarantees to its subsidiaries, joint
ventures & associates and has made investments during the year in compliance with the
provisions of the Companies Act, 2013 and rules notified thereunder.
The details of such investments made and loans / guarantees provided as on March 31, 2020
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 March 31, 2020 in the prescribed
form MGT-9 has been prepared and hosted on the website of the Company www.iocl.com.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company complies with the applicable Secretarial Standards issued
by the Institute of Company Secretaries of India (ICSI).
CREDIT RATING OF SECURITIES
The credit rating assigned by rating agencies for the various debt
instruments of the Company is provided in the Corporate Governance Report.
INVESTOR EDUCATION & PROTECTION FUND (IEPF)
The details of unpaid / unclaimed dividend and shares transferred to
the IEPF in compliance with the provisions of the Companies Act, 2013 has been provided in
the Corporate Governance Report.
MATERIAL CHANGES AFFECTING THE COMPANY
The pandemic COVID-19 and the consequent lockdown in the country since
end of March 2020 had impacted the operations as well as sales of the Company. However,
the relaxations in the lockdown conditions had resulted in gradual improvement in sales of
petroleum products as well as operations, which is expected to improve further during the
financial year 2020-21.
DIRECTORS' RESPONSIBILITY STATEMENT
a. Pursuant to the requirement under clause (c) of subsection (3) of
Sec.134 of the Companies Act, 2013 with respect to the Directors' Responsibility
Statement, it is hereby confirmed that:
b. in the preparation of the Annual Accounts, the applicable accounting
standards had been followed along with proper explanation relating to material departures;
c. the Directors had selected such accounting policies and applied them
consistently and made judgements 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;
d. 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;
e. the Directors had prepared the annual accounts on a going concern
basis; and
f. 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.
g. 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 appreciation for the
dedicated and sincere efforts of the employees of the IndianOil family, the contract
labour, channel partners for their untiring efforts to maintain the supplies of petroleum
products during the lockdown caused by Covid-19 pandemic, as well as for the performance
achieved during the year 2019-20. 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 Company. The
Board would like to place on record its appreciation for the valuable guidance and
significant contribution made by S/Shri Sanjiv Singh, B. V. Ramagopal, Ashutosh Jindal,
Parindu Bhagat and Ashish Chatterjee during their tenure on the Board of the Company.
|
Sd/- |
|
(S. M. Vaidya) |
| Place : New Delhi |
Chairman |
| Date : August 21, 2020 |
DIN:06995642 |
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