Indian Oil Corporation Ltd Directors Report.

Dear Shareholders,

On behalf of the Board of Directors of IndianOil, it is my privilege to present the 62nd Annual Report and the Fourth Integrated Annual Report of the Company for the financial year ended March 31, 2021, along with the Audited Standalone and Consolidated Financial Statements and Auditors Report thereon.

The year stood testimony to the grit and perseverance of IOCians who scripted success stories despite the challenges unleashed by the Covid-19 pandemic. It was the ‘never-say-die spirit and the indomitable courage of the Companys frontline warriors across the entire supply chain that kept India as well as IndianOil on the move during this unprecedented crisis in modern human history. The Company not only maintained the supply of petroleum products across the country, but also exceeded the tough capital expenditure target for expanding its infrastructure and strengthening its business goals by launching innovative products and services in the retail space.

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

Performance Review

Financial

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

2020-21 2019-20
Particulars US$ Million Rs Crore US$ Million Rs Crore
Revenue from Operations 69,374 5,14,890 79,892 5,66,354
(Inclusive of Excise Duty & Sale of Services)
EBITDA 5,742 42,614 3,154 22,356
(Profit Before Exceptional Items, Finance Cost, Tax, Depreciation
& Amortisation)
Finance Cost 417 3,094 843 5,979
Depreciation 1,321 9,804 1,237 8,766
Profit Before Tax & Exceptional Items 4,004 29,716 1,074 7,611
Exceptional Items - - (1,595) (11,305)
Profit Before Tax 4,004 29,716 (521) (3,694)
Tax Provision 1,062 7,880 (706) (5,007)
Profit After Tax 2,942 21,836 185 1,313
Interim Dividend paid 1,299 9,640 550 3,902
Final Dividend paid - - 130 918
Dividend Distribution Tax - - 139 986
Insurance Reserve (Net) 1 11 3 20
General Reserve 1,642 12,185 (637) (4,513)
Balance Carried to Next Year - - - -

SHARE VALUE

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

Note: Exchange Rate used

For 2020-21: Average Rate 1 US$ = Rs 74.22 and Closing Rate 1 US$ = Rs 73.12 as on March 31, 2021 For 2019-20: Average Rate 1 US$ = Rs 70.89 and Closing Rate 1 US$ = Rs 75.67 as on March 31, 2020

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

Issue of Securities / Changes In Share Capital

There was no change in the share capital of the Company during the year. However, the Company issued Unsecured, Rated, Listed, Taxable, Redeemable, Non-Convertible Debentures (NCDs) aggregating to Rs 7,915.20 Crore on private placement basis, which were listed on the Debt Segment of the NSE and BSE. The funds were utilised for the purpose for which they were raised and there were no deviations or variations in their utilisation.

Dividend

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

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

per share. In addition, the Board of the Company has recommended a final dividend of Rs 1.50 per share for the year, thereby taking the total dividend for the year to Rs 12 per share with a total pay-out of Rs 11,017.25 Crore equivalent to 50.50% of the PAT.

This is the 54th consecutive year of dividend declaration with total payout of Rs 74,937 Crore (including the proposed final dividend for the year 2020-21)

Contribution to Exchequer

Over the years, the Company has been the largest contributor to the Government exchequer in the form of duties, taxes, and dividend. During the year, Rs 2,38,786 Crore was paid to the exchequer as against Rs 1,82,067 Crore paid in the previous year, an increase of 31% over the previous year. An amount of Rs 1,53,827 Crore was paid to the Central Exchequer and Rs 84,959 Crore to the States Exchequer compared to Rs 96,104 Crore and Rs 85,963 Crore paid in the previous year, respectively.

Consolidated Financial Performance

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 shared below:

2020-21 2019-20
Particulars
(US$ Million) (K Crore) (US$ Million) (K Crore)
Revenue from Operations 70094 520237 81251 575990
(Inclusive of Excise Duty & Sale of Services)
Profit Before Tax 4143 30751 (1012) (7177)
Profit After Tax 2932 21762 (265) (1,876)
Less: Share of Minority 17 124 (139) (983)
Profit for the Group 2915 21638 (126) (893)

Note: Exchange Rate used

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

Operational Performance

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

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

Refineries

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

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

The Companys Panipat Naptha Cracker (PNC) plant was recognised as one of the ‘Excellent Energy Efficient Units by the Confederation of Indian Industries (CII). PNC Polypropylene

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

Indias first batch of the premium gasoline XP100 was produced from the Mathura Refinery using high octane streams from in-house researched and developed Octamax technology. Subsequently, other refineries also produced the XP100 gasoline to meet the countrywide demand. With this endeavour, the Company catapulted India globally to a select league of nations with such superior quality fuel.

During the year, 16 new crude oil grades were included in the Companys basket increasing its size to 201 crudes. Over the years, the share of North and South American crude oil grades processed by the Company has increased, standing at 10.1% during 2020-21, thereby improving the flexibility in operations and resilience in crude purchases.

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

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

9 MMTPA greenfield Cauvery Basin Refinery in a joint venture with Chennai Petroleum Corporation Limited (a subsidiary) at Nagapattinam in Tamil Nadu. All refinery expansion with petrochemical and lube integration projects along with other approved capital expenditure (capex) plans translate into an investment commitment of close to Rupees One LakRs Crore in the next four to five years, aimed at a high growth trajectory.

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

Pipelines

The Company continued to expand its pipeline network during the year and crossed yet another milestone of 15,000 Km with a combined throughput capacity of 94.56 Million Tonnes per annum for crude oil / product and 21.69 MMSCMD for gas pipelines. During the year, the crude oil pipelines achieved a throughput of 44.13 MMT and product pipelines achieved a throughput of 31.89 MMT. The lower throughput of product and crude pipelines was mainly due to drop in demand caused by Covid-19. However, gas pipelines achieved the highest ever throughput of 2,691 MMSCM, which is 12% higher than the throughput of 2,400 MMSCM achieved during 2019-20. Your Company continued to demonstrate efficient pipeline operation by achieving a reduction of 13.5% in Specific Energy Consumption (SEC) vis--vis last year.

Your Company commissioned a 337 Km pipeline during the year, which was dedicated to the nation by the Honble Prime Minister of India. Apart from the commissioning of the Durgapur–Banka (193 Km) section of the Paradip–Haldia–Durgapur LPG pipeline project and the Ramanathapuram–Tuticorin section (143.5 Km) of the Ennore–Thiruvallur–Bengaluru–Puducherry–Nagapattinam–Madurai–Tuticorin natural gas pipeline, capacity augmentation of the Panipat–Bhatinda pipeline was also completed during the year.

Your Company is executing pipeline projects worth Rs 25,300 Crore, which are under various stages of implementation. Commissioning of these projects will add around 6,600 Km to the existing pipeline network, leading to a total pipeline network length of 21,000 Km with liquid pipeline capacity of approximately 137 MMTPA and gas pipeline capacity of approximately 51.70 MMSCMD. Your Company also bagged the consultancy work for the 2,805-Km long Kandla–Gorakhpur LPG pipeline, one of the worlds longest LPG pipelines.

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

Marketing

Amid the lockdown and intermittent travel restrictions during the year, your Company continued to serve the nation by ensuring uninterrupted supply of petroleum products across the country. Domestic sale of 69.35 MMT of petroleum products was registered during the year as against 78.54 MMT registered in the previous year. The Company served around 2.25 Crore customers daily at its retail outlets and delivered around 27 Lakhs LPG cylinders per day to fulfil the energy requirement of Indias citizens.

During the year, your Company commissioned 3,000 retail outlets (ROs), which was the highest ever by any Oil Marketing Company. To promote new age fuelling trends, the Company has already commissioned 637 Door-to-door delivery mobile dispensers for diesel.

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

To promote alternative fuels, your Company added 310 new CNG, 17 Compressed Biogas (CBG), 205 electric vehicle (EV) charging and 27 battery swapping stations during the year. As of the close of the year, the Company was operating 1,059 CNG, 21 CBG, 257 EV charging and 29 battery swapping stations in the country.

Indias first super premium petrol, XP100, with an octane value of 100 was launched by the Company during the year. Currently, XP100 is being sold through 87 ROs across 46 cities.

Subsequently, in May 2021, XP95 (95 Octane Premium Petrol) was launched to enable automobile manufacturers accelerate automobile development to meet the Corporate Average Fuel Efficiency (CAFE) and BS-VI Stage 2 norms that will come into effect from 2022.

In an initiative towards promoting womens empowerment in the distribution network, 83 all-women retail outlets were launched across India, during the year. Your Company decided to percolate this culture into every corner of the country by increasing the share of space for women at the Companys forecourts and customer touch points.

To benchmark digital experience at the forecourt, initiatives like the Integrated Transaction Processing System (ITPS) and Secondary Dealer Management System (SDMS) were launched, which will ensure linkage of payment with actual delivery of fuel and loyalty programme through automation with a single PoS terminal for acceptance of CC, DC, UPI, Bharat QR, Wallets, XTRAREWARDS, XTRAPOWER, etc. Currently implemented at over 3,000 ROs, the same will be expanded to over 30,000 ROs by end of this year.

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

Your Company achieved the highest ever LPG sale of 12.96 MMT during the year and released more than 38 Lakhs new LPG connections. To improve customer reach and customer satisfaction in services, the Company commissioned 293 new LPG distributorships, taking their total number to 12,726.

Among various initiatives for the convenience of LPG customers, a countrywide 24X7 common booking number (7718955555) for LPG refills was introduced with options of vernacular languages. Also, for the first time in the industry, a single number was launched for refill bookings and requests for new connections through missed calls.

During the year, Indane XtraTej, differentiated LPG with nano-additives for enhanced performance, was launched. The 5-kg cylinder, rebranded as Chhotu, was a big fillip to brand Indane. In addition, Indane composite cylinders were launched in 5 kg and 10 kg units to offer a new-age and lightweight LPG cylinder to customers.

SERVO, the lubricant brand of the Company, improved its market share and retained its numero uno position registering a growth of 26% over the previous year with a sale of 561 TMT. SERVO expanded its footprint to Fiji and Turkey, taking the Superbrands presence to 32 countries. Approvals for

38 SERVO grades were obtained from Original Equipment Manufacturers (OEMs) like Tata Motors, Mahindra & Mahindra, KIA Motors, Nissan, Ashok Leyland, Honda, etc. In view of future demand as well as for manufacturing futuristic lube formulations for enhancing performance, your Company is setting up the worlds second largest integrated ultramodern, state-of-the-art lube complex of 450 TMTPA capacity with the largest product portfolio at Chennai, with an investment of about Rs 1,400 Crore.

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

The cryogenics group of the Company maintained its leadership and sold over 30,000 units of cryo-cans during the year. The cryogenics group also manufactured 19 refuellers, 10 aviation containerised tanks with modules, and two customised heavy duty refuellers. In line with the countrys requirement the cryogenics group undertook manufacturing of 20 LOx tankers, to be supplied in the current year. To meet the increasing requirement of cryo products, including LNG and LOx equipment in the country, the Company is planning to expand its manufacturing facilities in and around the existing plant at Nashik.

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

In a first of its kind campaign, Customers Day was celebrated on January 9, 2021, across the network of retail outlets, LPG distributorships, SERVO stockists, AFSs and other supply locations. The widely followed event brought together customers, channel partners and their families, and trended as one of the top grossing events.

Research and Development

IndianOils Team R&D exhibited exemplary resilience in continuing the pursuit of development and commercialisation of indigenous technologies. The Centre pursued cutting-edge research programmes in core petroleum activities like lubricant, refining, petrochemicals, differentiated fuels, high efficiency lubricants and pipeline transportation technology, among others. In addition, the R&D Centre also focussed on research activities in sunrise areas like alternative energy segments like bio-energy, solar energy, hydrogen economy, energy storage, nanotechnology, carbon capture and utilisation, and battery technologies, etc.

During the year, these R&D pursuits resulted in the filing of 169 patents (69 in India and 100 overseas) taking the total tally of filed patents till March 31, 2021 to 1,294. A hundred and eighty patents were granted, taking the Companys portfolio of effective patents to 1,165 as on March 31, 2021.

The R&D Centre sustained its efforts in the field of lubricants to achieve self-sufficiency with the Government of Indias intent of an ‘Aatmanirbhar Bharat with the issuance of 106 formulations and 47 approvals from Original Equipment Manufacturers (OEM) and customers. The INDMAX technology was selected for a 1.9 MMTPA Petro FCC unit by Numaligarh Refinery Limited, the first success outside the Companys own refineries in the domestic refining sector.

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

The R&D Centres indigenous Octamax technology enabled the production and launch of XP100, a niche, high octane petrol. A corrosion inhibitor developed by the Centre was accepted for all product and offshore crude pipelines.

In a boost towards green energy, your Company undertook a successful trial run of 50 buses on HCNG fuel technology. To reduce import dependency, development of a novel 2G Enzyme was undertaken for the production of 2G ethanol from lignocellulosic biomass. A demonstration plant of 10 Tonnes Per Day is under construction at Panipat to showcase this technology. A facility was created at Palwal, Haryana, for developing the off-site pre-treatment technology of paddy straw biomass. To support the Government of Indias ‘Waste to Value initiative, your Company developed and successfully demonstrated the eco-friendly Plastic to Fuel (IndEcoP2F) technology for the conversion of waste plastic at the Digboi Refinery with 95.4 wt% plastic to fuel conversion.

Business Development

Beyond its core business, the Company also integrated and diversified into new business segments through steady and timely investments. Its expanded portfolio of petrochemicals, natural gas, exploration and production, and alternative energy stands out, as its key strength to take on the changes triggered by the ongoing energy transition.

Petrochemicals

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

The petrochemicals business of the Company demonstrated exemplary performance in the face of tough times and uncertainties during the year. The conditions were exacting for the domestic as well as global petrochemical industry due to sharp volatility in demand and feedstock prices. Certain unexpected events like hurricanes and polar storm in the US, and worldwide container shortages further impacted the supply chain, which impacted global trade.

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

A new Product Applications and Development Centre (PADC) was set up at Paradip (Odisha) during the year, to cater to the product application and testing needs of the industry as well as to support the entrepreneurial activities in the region. The Company continued to expand its grade basket in polymers and launched four new polymer grades. These developments are in line with the Government of Indias ‘Aatmanirbhar Bharat campaign, along with maintaining the Companys competitive advantage in the petrochemicals business. In addition, 21 OEM approvals were received from major Indian and international brands for different polymer grades.

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

During the year, a ‘Share Subscription-cum-Shareholders Agreement & Memorandum of Understanding was signed with the Odisha Industrial Infrastructure Development Corporation, StateGovernmentofOdisha,forthedevelopmentoftheParadip Plastic Park. The plastic park will help in the development of downstream plastic industries, auxiliary industries and MSMEs in Odisha, generating new employment opportunities in the state and region.

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

TheeffortsoftheCompanyweredulyrecognisedbytheindustry and for its exemplary performance in the petrochemicals sector during the year, your Company was awarded the prestigious ‘FICCI Chemicals and Petrochemicals Awards 2021 in two categories—namely the ‘Company of the year in Petrochemicals (Public Sector) and ‘Best Contribution to Academia.

Natural Gas

The Company continued to expand its natural gas business during the year and clocked sales (including internal consumption) of 5.38 MMT as against 5.42 MMT in 2019-20. The Company now has a customer base of 70 R-LNG patrons with the addition of nine new customers during the year, besides supplies to its own refineries at Mathura (Uttar Pradesh), Panipat (Haryana) and Koyali (Gujarat). Sale through the Companys ‘LNG at the Doorstep initiative grew by 25% during the year to reach a level of 104.25 TMT. During the year, 33 LNG cargoes were imported, of which 23 were spot cargoes, while 10 were against long-term contracts.

City Gas Distribution (CGD)

Your Company is swiftly expanding its presence in the CGD business. Along with its two joint venture companies, Green Gas Limited (with GAIL India Limited) and IndianOil Adani Gas Private Limited (with Adani Total Gas Limited), it has authorisation for 40 Geographical Areas (GAs) spread across the length and breadth of the country. During the year, the Company commissioned its first standalone GA in Rewa (Madhya Pradesh), while eight GAs were commissioned by the Companys joint ventures. With this, 22 of the 40 GAs under the Companys fold are now operational. During the year, 0.68 Lakhs PNG connections were released across all GAs, either by the Company directly or through its joint venture companies. On its own, your Company commissioned 12 CNG stations during the year, and commenced registration and on-boarding of domestic PNG customers in various GAs through its in-house portal. In 2021-22, apart from achieving the stipulated Minimum Work Progress (MWP) targets, gas-in is planned for the GAs at Aurangabad (Maharashtra), Bokaro (Jharkhand), Ashoknagar (Madhya Pradesh) and Arwal (Bihar).

Exploration & Production (E&P)

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

During the year, the share of production from the producing assets was 3.86 MMT of oil equivalent (MMtoe). Production from the assets stood lower than 4.26 MMtoe registered in the previous year, as OPEC+ cuts and heavy inventory levels affected production in overseas blocks.

During the year, oil flow was established in the appraisal well drilled in the Companys Onshore Block 1 in Abu Dhabi. The Company has 50% participating interest in the asset, which is also its first overseas block with IndianOil as operator.

The Companys Block AAP-ON-94/1 in Dirok Field in Assam recorded the highest ever daily production of natural gas as on August 5, 2020, which was double the Field Development Plan approved at the production level.

Alternative Energy

Your Company is steadily progressing towards harnessing renewable energy to minimise carbon emissions for a green economy. The Company has an installed capacity of 232.95 MW of renewable energy, comprising 167.6-MW wind power capacity and 65.35-MW solar energy capacity as on March 31, 2021. These projects generated 329.45 GWh during the year, resulting in emission mitigation of 2.6 Lakhs Metric

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

During the year, the company solarised 1658 retail outlets (ROs). As on 31.03.2021, 18336 of IndianOils ROs were powered by solar power systems with cumulatative installed capacity of 102.4 MW. Upscaling initiatives are in hand for meeting the increasing grid power demand of refineries due to future expansion plans.

Committed to enhance its green footprint, your Company is taking strides to contributing towards better air quality by reducing crop burning and lowering vehicular emissions by higher ethanol blending rate (a green and clean fuel). In this regard, the Company is putting up a second-generation ethanol plant at Panipat and a biofuel complex, including CBG plant, at Gorakhpur (Uttar Pradesh). The Company also established two ‘cattle dung to biogas plants in Madhya Pradesh and Uttar Pradesh, while another is being implemented in Rajasthan.

Your Company is the first and only Oil and Gas Company selling CBG through 23 ROs across eight states under the ‘IndiGreen brand. The Company has issued a Letter of Intent to over 1,500 plants for production and supply of approximately 3.5 MMTPA of CBG under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme of the Government of India.

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

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

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

Sustainable Development

As a responsible entity, your Company has taken a number of sustainability initiatives across its locations related to energy conservation, energy efficiency, renewable energy and carbon sequestration, water management through reducing consumption, recycling and rainwater harvesting, and waste management through reducing, reusing and recycling initiatives.

Across the company,rainwater harvesting systems have been installed with catchment area covering more than 2500 Ha and harvesting more than 8 Billion liters of rain water in 2020-21. The increase in rain water harvested during the year is an account of inclusion of the watershed projects implemented in the refineries. The Company launched a unique initiative, #TreeCheers, in November 2020, under which the Company planted saplings on behalf of patrons, who refuelled their new vehicles at the Companys outlets. A total of 2.26 Lakhs saplings were planted across the country, during the five-day campaign period, making it one of the biggest success stories in recent times.

The Company is replacing all conventional lights with LED, across its installations. During the year, around 1.12 Lakhs LED lights installed with cumulative replacement count of 7.19 Lakhs of LED lights. Paper recycling is another focus area for the company. During the year, 291 Tonnes of waste paper were recycled through designated recyclers. The Company is also developing a supply chain for plastic recycling with a vision towards plastic neutrality. An MoU was signed with a technology provider for exploring various technological options, such as plastic waste recycling and upcycling, waste-to-chemicals production, anaerobic digestion of organic waste, etc.

Overseas Business

Your Companys approach to overseas business is underpinned by a four-pronged strategy, which includes investment in overseas projects and assets, opening of branch/ representative offices, export of products, and export of services. To expand its footprint in neighbouring countries, its subsidiary company, IOC Middle East FZE, formed a new joint venture company in Bangladesh for conducting LPG business and for exploring other business opportunities in the hydrocarbon sector in Bangladesh. Recently, the Company opened new branch/ representative offices in Myanmar, Bangladesh and Nepal to develop businesses in the downstream hydrocarbon sector in these countries.

MoUs were signed during the year with established international players of Bangladesh, Vietnam and Nepal for mutual cooperation across the entire hydrocarbon value chain, including oil and gas E&P, refining, transportation, setting up plants/terminals, supply and retailing, collaboration for R&D activities, providing consultancy, capacity building and secondment services, etc.

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

5,394 TMT of petroleum products to various countries, viz., Bangladesh, Mauritius, Sri Lanka, etc. In addition, 60 TMT of petrochemical products were exported during the year. In another breakthrough, an export contract was finalised for exporting HSD via land to Myanmar for constructing a two-lane road from Kaletwa to Zorinpui along the India–Myanmar Border in the Chin State of Myanmar under the ‘Kaladan MultiModal Transit Transport project.

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

The Company has been providing consultancy services/ capability building services/ secondment services in the Gulf Cooperation Council (GCC) region, South East Asia and East Africa.

Explosives

The explosives group achieved an all-time high production and sales of 265.5 TMT of bulk explosives during the year, registering a growth of 29% over the previous years volume of 205 TMT.

Diversification

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

International Trade

Your Company imported 53.60 MMT of crude oil during the year, as against 59.75 MMT in the previous year to meet the crude oil requirement for processing at its refineries. The import was lower than the previous year due to drop in demand for petroleum products caused by the Covid-19 pandemic. The selection of crude oil is undertaken from a diversified mix of supply sources to optimise the cost as well as to improve flexibility. The import of petroleum products during the year was 8.58 MMT as against 8.57 MMT in the previous year. Various strategies, such as increasing offshore storage of crude and sale to strategic reserves, were deployed during the year to cope with the sudden drop in demand.

Projects

Your Company believes that creation of infrastructure is important to make petroleum products available to customers at the least cost. Therefore, the Company continued to invest in greenfield and brownfield projects. During the year, the total capex spent by the Company was J 28,684 Crore (including Rs 24,051 Crore on its capital projects and the rest towards equity investment in its joint ventures/ subsidiaries). The development of infrastructure was financed through an optimum mix of internal accruals and borrowings from domestic as well as international markets.

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

Your Company is committed towards the expansion of its pipeline network and is executing pipeline projects to take the length to 21,000 Km by the end of this fiscal. Major ongoing pipeline projects include the Haldia–Barauni crude oil pipeline, the Paradip–Hyderabad product pipeline, augmentation of the Paradip–Haldia–Durgapur LPG pipeline and its extension up to Patna and Muzaffarpur, the Koyali–Ahmednagar–Solapur product pipeline, the Paradip–Somnathpur–Haldia product pipeline, augmentation of the Salaya–Mathura crude oil pipeline system and the Ennore–Thiruvallur–Bengaluru–Puducherry–Nagapattinam–Madurai–Tuticorin natural gas pipeline. In addition, your Company is undertaking massive LPG and natural gas pipeline projects through joint ventures, spanning approximately 9,300 Km. These include the Kandla–Gorakhpur LPG pipeline (the longest LPG pipeline in the world) through IHB Limited and the North East Natural Gas Grid through Indradhanush Gas Grid Limited (IGGL).

Your Company is also establishing a new R&D campus at Faridabad, Haryana, with state-of-the-art facilities at a cost of Rs 3,200 Crore to boost the research horizon of the R&D Centre, which has evolved into a world-class technology solutions provider.

Health, Safety & Environment (HS&E)

The Company believes that good HS&E performance is an integral part of efficient and profitable business management and, therefore, is committed to conduct its business with a strong environment conscience, ensuring sustainable development, safe workplaces and enrichment of the quality of life of its employees, customers and community. All refineries of the Company are certified to ISO:14064 standards for sustainable development as well as for the Occupational Health and Safety Management System (OHSAS-18001/ ISO:45001), besides having fully equipped occupational health centres.

Most of the pipeline installations and some of the marketing installations of the Company are also ISO-14001 certified. The API 1173 based Pipeline Safety Management System was introduced across the entire pipeline network. Compliance with safety systems and procedures as well as environmental laws is monitored at the unit, division, and corporate levels.

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

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

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

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

Sarvashreshtha Suraksha Puraskar.

DIGITAL INITIATIVES

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

The digital transformation project, i-DRIVE, made significant strides in 2020-21 and scripted notable successes to accelerate the pace of our digital interventions in the times ahead. Some of these initiatives include the Digital Centre of Excellence (DCoE) for an analytics hub, which operationalised more than 25 AI/ ML-based advanced analytics use-cases, such as yield maximisation of units in our refineries, optimum

cleaning schedule for heat exchanger trains, a decision support system for LPG cylinder supply forecasting, PetChem inventory optimisation, customer churn analysis for industrial customers, predictive maintenance and remote monitoring of critical equipment like gas turbines, etc.

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

Implementation of off-the-shelf solutions, viz., the data reconciliation and yield accounting tool (DRYA), shutdown management system, integrated shipping tool, end-to-end project management suite, multi-BU pricing tool, network planning tool, coastal scheduler, and the Geographic Information System (GIS) acted as enablers for enhancing process efficiency.

Human Resources

The strong, dedicated and resilient workforce of 31,648 IOCians continued to perform their duties, despite challenges posed by Covid-19, to fuel the country. The total number of employees as on March 31, 2021 include 17,762 executives and 13,886 non-executives and 2,775 women employees comprising 8.77% of the total workforce. During the year, the Company recruited 371 executives. 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 the reservation in services for SC / ST / OBC / PwBD (Persons with Benchmark Disabilities) / Ex-servicemen / 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 levels 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 as Annexure – I to this Report.

The provisions of 4% reservation for persons with disabilities in line with the Government of Indias guidelines/ instructions were implemented by the Company. Necessary concessions/ relaxations in accordance with the rules in this regard were extended to physically challenged persons in recruitment. The number of differently abled employees as on March 31, 2021 was 707, constituting 2.23% of the total employee strength.

During the year, cordial industrial relations were maintained across the Company. 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 collectives, establishing a harmonious relationship for industrial peace, thereby leading to higher productivity.

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

During the year, a Talent Vision and Strategy Framework for three years was launched. Your Companys vision was to ‘Align our People and Talent Capability to deliver our Energy Promise to the Nation. Along with its core values, the Company will be driven by a DARE2 framework, which emphasises ‘Dexterity, Adaptability, Resilience, Engagement and Empathy.

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

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

Particulars of Employees

The provisions of Section 134(3)(e) of the Act are not applicable to a Government Company. Consequently, details on Companys policy on Directors appointment and other matters as required under Section 178 (3) of the Act, are not provided.

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

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

Hindi Implementation

The Company is committed to implementing Hindi into the day-to-day functioning at its various offices/ locations/ units. The provisions of the Official Language Act, 1963, and rules notified thereunder were complied with. The communications received in Hindi including 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.

Corporate Social Responsibility

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

During the year, the Company also undertook various CSR initiatives to overcome the challenges posed by the Covid-19 pandemic like insurance coverage for employees of business partners, providing medical equipment to hospitals, procurement of cold chain equipment for transportation of vaccines, contributions to the PM Cares Fund, etc. During the year, as against the CSR budget of Rs 342 Crore (being 2% of the average profit of the previous three years, as per the provisions of the Companies Act, 2013), the Company set aside an enhanced budget of Rs 460.37 Crore to ensure continuity in the planned CSR activities including many flagship projects. The entire budget of Rs 460.37 Crore was spent during the year on various CSR activities. A report on the Companys CSR activities as per the provisions of the Companies Act, along with CSR highlights for the year is attached as Annexure – II 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 on the Company website: https:// www.iocl.com/download/Policies/IOC_S&CSR_Policy.pdf.

Right to Information Act (RTI)

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

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

During the year, 4,813 requests and 578 first appeals were received and disposed-off within the prescribed timelines. In addition, 90 second appeals were filed before the Central Information Commission, New Delhi, and all were handled without any penalty/disciplinary action by the Honble 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 Unit / Region / Head Office level, headed by senior-level women employee to deal with sexual harassment complaints.

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

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

Vigilance

The objective of the vigilance function is to ensure maintenance of the highest level of integrity in the Company. The Company has a separate Vigilance Department, which is headed by the Chief Vigilance Officer. The department acts as a link between the Company and Chief Vigilance Commissioner and also advises the Company on all matters pertaining to the subject. 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, 62 vigilance awareness programmes were conducted, which were attended by about 2,400employees.DisciplinaryactionunderapplicableConduct, Discipline and Appeal Rules, 1980, and Certified Standing Orders were taken by the Company for irregularities/lapses. During the year, 44 disciplinary matters related to vigilance cases were disposed of and 16 such cases were pending at the end of year. The cases pertain to irregularities such as indiscipline, dishonesty, negligence in performance of duty or neglect of work, etc. The Company continuously endeavours to ensure fair and transparent transactions through technology interventions and system/process review in consultation with the Central Vigilance Commission and internal vigilance setup. The Vigilance Department (Corporate) of the Company was awarded ISO certification during the year.

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 were outstanding as on March 31, 2021, except the old cases amounting to Rs 55,000, which remain unpaid due to unsettled legal/court cases.

Corporate Governance

Your Company always endeavours to adhere to the highest standards of corporate governance, which are within the control of the Company. A comprehensive Report on Corporate Governance inter-alia 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. The certificate issued by the Statutory Auditors on Compliance with Corporate Governance guidelines is annexed to the Report on Corporate Governance.

Managements Discussion & Analysis Report

The Managements Discussion and 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, providing information on the various initiatives taken with respect to environmental, social and governance perspectives, has been prepared in accordance with the directives of SEBI and is hosted on the website of the Company on the link https://www.iocl.com/ business-responsibility-report

Audit Committee

The Audit Committee of the Board comprised three members, as on March 31, 2021 of whom two were Independent Directors (including the Chairman) and one non-executive Director. The observations / recommendations made by the Audit Committee during the year were put up to the Board and the same were accepted by the Board. Other details of the Audit Committee, such as its composition, terms of reference, meetings held, etc., are provided in the Corporate Governance Report.

Other Board Committees

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

Code of Conduct

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

Risk Management

The Company considers risk management as a key element of its business operations and has put in place effective systems to identify, analyse, monitor and mitigate risks to ensure the organisations sustained growth and profitability.

The Companys 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 Companys business. The Company has constituted a Risk Management Committee comprising Whole-time Directors which oversees the risk management activities. A report was, thereafter, put up to the Audit Committee and the Board.

Over and above the various business risks, which are apprehended and analysed in the regular course of business, the Company encountered a totally unprecedented risk to its business posed by the Covid-19 pandemic. However, your Company demonstrated strong resilience in the face of adversity during the pandemic despite demand destruction and declining product cracks. The risks posed by Covid-19 were closely monitored by the top management of the Company on a regular basis to ensure continuity of business operations in an optimised and safe manner.

Internal Financial Controls

The Company 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 an Executive Director, who 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 Auditors Report on the Internal Financial Controls over financial reporting of the Company under Clause (i) of Sub-Section 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.

The Board believes that systems in place provide a reasonable assurance that the Companys internal financial controls are designed effectively and are operating as intended.

Statutory Auditors

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

The Auditors remuneration for the year was fixed at Rs 200 Lakhs 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 to the Company during 2020-21 was Rs 402 Lakhs.

Cost Audit

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 2020-21. A remuneration of Rs 20.20 Lakhs and applicable taxes was fixed by the Board for payment to the cost auditors for 2020-21, which was ratified by the shareholders in the last AGM. The cost audit reports are filed by the Central Cost Auditor with the Central Government in the prescribed form within the stipulated time.

Secretarial Audit

The Board had appointed M/s. Ragini Chokshi & Co., Practising Company Secretaries, to conduct the Secretarial Audit for 2020-21. The Secretarial Auditor in their report have stated that during the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc., except as under:

The Company could not comply with the requirement of having not less than 50% of the Board of Directors as Non-Executive Directors for the period September 22, 2020 to March 31, 2021.

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

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

In this regard, it 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 Women Directors) vests with the Government of India as per Government guidelines. Further, the Ministry of Corporate Affairs, vide notification dated June 5, 2015, has provided exemption to Government Companies, regarding the provisions related to evaluation of performance of Directors under the Companies Act, 2013, as the evaluation is carried out by the administrative ministry.

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

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

Reporting of Frauds by Auditors

The Auditors in their report for the year have not reported 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 and natural gas, API line pipes and certain proprietary items) during 2020-21 was as under:

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

The deficit of 3.25% and 2.86% under the sub-targets was due 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, including 76 vendor development programmes.

Subsidiaries, Joint Ventures & Associates

During the financial year, two new joint venture companies were incorporated, as per details given below:

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

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

In March 2021, your Company exited from an inoperative joint venture, IndianOil Panipat Power Consortium Limited (IPPCL), through sale of its entire equity shareholding.

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 annexed to the Consolidated Financial Statements. The financial statements of the subsidiaries have also been hosted on the Company website, www.iocl.com, under the ‘Financial Performance section.

In accordance with the provisions of SEBI guidelines, your Company has framed a policy for determining material subsidiaries, which can be accessed on the Companys website at, https://www.iocl.com/download/Policies/Material_ Subsidiary_Policy.pdf.

Related Party Transactions (RPTs)

During the year, your Company entered RPTs, which were on arms length basis and were in the ordinary course of business. As required under the provisions of the Companies Act, 2013, and SEBI (LODR), all RPTs were approved by the Audit Committee.

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

In view thereof, there is no transaction which needs to be reported in Form No. AOC-2, in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is hosted on the Companys website and can be accessed at: https://iocl.com/download/RPT_Policy.pdf.

Energy Conservation, Technology Absorption and foreign Exchange Earnings and Outgo

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

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

Board of Directors & Key Managerial Personnel

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

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

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

3. Shri Gurmeet Singh, ceased to be Director (Marketing) w.e.f. April 1, 2021, consequent upon his superannuation.

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

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

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

Independent Directors

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

The Company being a Government Company, the power to appoint Directors (including Independent Directors) vests with the Government 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.

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.

Board Evaluation

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.

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 Rs 17.31 Crore was deposited ‘under protest with CPCB as interim compensation for restoration of the environment. Since then plant operations had commenced. Subsequently, based on the directions received from the NGT, a further amount of Rs 25 Crore was deposited as interim compensation for restoration of the environment. In January 2021, the Joint Committee visited the refinery and petrochemicals plant at Panipat to review the progress of the various initiatives as suggested by the Committee. The restoration plan was submitted by the Committee in January and the final report on the progress of its recommendations to the NGT in February 2021. The case was heard by the Honble NGT in March 2021 and was disposed of with directions to complete all the recommendations of the Joint Committee within a time schedule.

Vigil Mechanism / Whistle-Blower Policy

The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has established a robust Vigil Mechanism and a whistle-blower policy in accordance with provisions of the Act and Listing Regulations. Under the whistle-blower policy, 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 Companys website at: https:// iocl.com/download/Policies/Whistle_Blower_policy.pdf.

Details of Loans / Investments / Guarantees

The Company has provided loans / guarantees to its subsidiaries, joint ventures and 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, 2021 are provided in the Standalone Financial Statement.

Annual Return

As required under the provisions of the Companies Act, 2013, the Annual Return is hosted on the Companys website and can be accessed from the link: https://iocl.com/annual-return.

Compliance with Secretarial Standards

The Company complies with the applicable Secretarial Standards 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 Covid-19 pandemic and the consequent lockdown in the country since the end of March 2020 had impacted the operations as well as sales of the Company. However, the gradual relaxations in the lockdown during the year resulted in improvement in sales as well as operations. With the resurgence of the second wave of Covid-19, there has been some impact on the demand of petroleum products since April 2021. The Company is taking necessary steps to overcome the challenges.

Directors Responsibility Statement

Pursuant to Sec.134(3)(c) of the Companies Act, 2013 pertaining 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 alongwith proper explanation relating to material departures;

(b) 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;

(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 appreciation for the sincere, dedicated and untiring efforts of the employees of the Company, the contract labourers, and employees of business channel partners to ensure the supply of petroleum products across the country during the lockdown and restrictions caused by the Covid-19 pandemic, and for achieving an excellent performance despite challenges during the year. The Board would also like to thank the Government of India, particularly the Ministry of Petroleum & Natural Gas, as well as the various State Governments, regulatory and statutory authorities, for their support as well as guidance 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 Shri Vinoo Mathur, Shri Samirendra Chatterjee, Shri C. R. Biswal, Dr Jagdish Kishwan, Shri Sankar Chakraborti, Shri D. S. Shekhawat, Shri Akshay Kumar Singh, Shri Gurmeet Singh and Shri Rajendra Arlekar during their tenure on the Board of the Company.

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