Indian Oil Corporation

Dear Members
 
 On behalf of the Board of Directors, I have great pleasure in
 presenting the 49th Annual Report on the business and operations of the
 Corporation for the financial year ended 31st March, 2008 along with
 the Audited Statement of Accounts, Auditors Report and the report on
 the Accounts by the Comptroller & Auditor General of India conveying
 nil comments.
 
 PERFORMANCE OVERVIEW 
 
 FINANCIAL
                                   2007-08               2006-07
                            USS Million    Rs. in  US$ Million  Rs. in
                                           Crore                 Crore
 
 Turnover
 (inclusive of Excise Duty)      61,700    247,479    50,777    220,779
 Gross Profit
 (before Depreciation,
 Interest Expenditure and Tax)    3,575     14,339     3,363     14,622
 Interest Payment                   387      1,551       346      1,505
 Depreciation                       675      2,708       605      2,632
 Prof it Before Tax               2,513     10,080     2,412     10,485
 Tax Provision                      777      3,117       687      2,986
 Profit After Tax                 1,736      6,963     1,725      7,499
 Appropriations
 Interim Dividend                    -         -         161        701
 Proposed Dividend                  164        656       357      1,550
 Corporate Dividend Tax              19         76        83        362
 Insurance Reserve                    2         10         2         10
 Bond Redemption Reserve             55        219       (40)      (175)
 General Reserve                    174        697     1,162      5,051
 Balance carried to Balance Sheet 1,322      5,305
 
 PHYSICAL
 
                                            Million Metric Tonnes (MMT)
                                         2007-08             2006-07
 
 Product Sales (including Exports)         62.62               57.97
 Refineries Throughput                     47.40               44.00
 Pipelines Throughput                      57.12               51.69
 
 SHARE VALUE
 
                                   2007-08              2006-07
                               US$        Rupees     US$       Rupees
 
 Cash Earnings Per Share      2.02         81.10     1.95       84.97
 Earnings Per Share           1.46         58.39     1.45       62.90
 Book Value Per Share         8.59        344.58     6.72      292.34
 
 Notes:
 
 (1) Exchange rates used:
 
 One US$ = Rs.40.11 as on 31.3.2008
 
 One US$ = Rs.43.48 as on 31.3.2007
 
 (2) Figures for the previous year have been regrouped, wherever
 necessary.
 
 DIVIDEND
 
 The Board of Directors of your Corporation has recommended a dividend
 of 55% on the paid-up share capital. This is the 42nd consecutive year
 of dividend declaration by your Corporation. So far, your Corporation
 has paid a cumulative dividend of Rs. 13,853 crore, excluding a
 dividend of Rs. 655.81 crore payable for the current year after
 approval by shareholders.
 
 CONTRIBUTION TO EXCHEQUER
 
 IndianOil makes enormous contribution to the Exchequer in the form of
 duties and taxes. During the year, Rs. 62,668 crore was paid to the
 Exchequer as against Rs. 56,164 crore in the previous year.  Out of
 this, Rs.34,249 crore was paid to the Central Exchequer and Rs.28,419
 crore to the States Exchequer.
 
 PUBLIC DEPOSIT SCHEMES
 
 The Public Deposit Scheme, which is open only for employees and
 ex-employees of the Corporation, had outstanding deposits amounting to
 Rs. 1.54 crore as on 31st March, 2008. The rate of interest is 6% per
 annum.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 In accordance with the Accounting Standards issued by the Institute of
 Chartered Accountants of India, your Corporation has prepared the
 Consolidated Financial Statements of its subsidiaries and joint venture
 entities. The highlights of the Consolidated Financial Results are as
 follows:
 
                                                        (Rs. in Crore)
                                               2007-08      2006-07
 
 Turnover
 (inclusive of Excise Duty)                    235,980      211,171
 Profit Before Tax                              12,489       11,612
 Profit for the Group (After Tax)                7,913        7,867
 
 CORPORATE GOVERNANCE
 
 The Managements Discussion & Analysis Report and the Corporate
 Governance Report have been incorporated as separate sections forming
 part of the Annual Report as stipulated under Clause-49 of the Listing
 Agreement with Stock Exchanges. The Company also complies with the
 Corporate Governance guidelines enunciated by the Department of Public
 Enterprises, Government of India, for Government Companies, which has
 been duly certified.
 
 The Board has enunciated a code of conduct for the Directors and senior
 management personnel of the Corporation, which has been circulated to
 all concerned and has also been hosted on the website of the
 Corporation. The Directors and senior management personnel have
 affirmed compliance with the code of conduct.
 
 IndianOil believes in total transparency, integrity and accountability
 in its functioning, and values its business ties with its numerous
 vendors and contractors. It has entered into a memorandum of
 understanding with Transparency International India in January 2008 for
 implementing an integrity pact programme for enhanced transparency in
 its business transactions, contracts and procurement processes.
 
 OPERATIONS
 
 Refineries
 
 IndianOil refineries achieved a record crude oil throughput of 47.40
 MMT during the year, surpassing the previous best of 44 MMT during
 2006-07. The seven refineries together achieved a capacity utilisation
 of over 100% and an overall distillate yield of 73.8% wt.  They also
 achieved record overall production of LPG, petrol, aviation turbine
 fuel, kerosene, diesel, linear alkyl benzene (LAB) and bitumen during
 the year.
 
 Pipelines
 
 The Pipelines Division continued to better the best performance by
 registering the highest ever operational throughput of 57.12 MMT of
 crude oil and petroleum products and commissioning new facilities.
 
 During the year, the crude oil blending facility at Mundra as well as
 the product dockline from the Narimanam terminal to the Chennai
 Petroleum Corporation Ltd. (CPCL) jetty at Nagapattinam were
 commissioned. The augmentation of the Bongaigaon-Siliguri section of
 the Guwahati-Siliguri pipeline also went online during the year with
 the erection and commissioning of new mainline pumping units at
 Bongaigaon and Madarihat.
 
 Marketing
 
 IndianOils Marketing Division maintained its dominant status in the
 downstream sector, registering a growth of 8.3% in sales during the
 year as against industry growth of 6.3%. Your Corporation sold 57.55
 MMT of petroleum products as against 53.36 MMT in the previous year. In
 addition, sale of natural gas has increased to 1.74 MMT from 1.48 MMT
 in the previous year and exports went up to 3.33 MMT as against 3.13
 MMT in the previous year.
 
 Your Corporation maintained its market leadership in terms of volumes
 for branded fuels with a cumulative conversion rate of 24.5% and market
 share of 45.5% for Xtra Premium petrol and a conversion rate of 15.8%
 and market share of 58% for Xtra Mile diesel. With its customer-centric
 approach, your Corporation upgraded 942 retail outlets to XtraCare
 standards, taking the total XtraCare network of retail outlets to
 1,994. The XtraPower fleet card continued its dominance with its usage
 increasing by 26%.
 
 PROJECTS
 
 Project implementation without time and cost overruns is accorded the
 highest priority by your Corporation. The status of the projects, as on
 date, is as under:
 
 Completed Projects
 
 - LPG treatment facilities at Barauni Refinery based on technology
 developed jointly by IndianOil R&D and Engineers India Ltd.
 
 - Yield and energy optimisation in atmospheric & vacuum distillation
 units (AVU-I & AVU-II) at Barauni Refinery
 
 - Air preheater in Visbreaker unit at Mathura Refinery
 
 - Revamp of continuous catalytic reforming Unit (CCRU) at Panipat
 Refinery
 
 - LPG and Gasoline yield improvement in RFCC unit at Panipat Refinery
 
 - Provision of six mounded bullets at Koyali Refinery
 
 - Modernisation of first tank-wagon gantry at Haldia Refinery
 
 - Recovery of Hydrogen from CCRU off gases at Gujarat Refinery
 
 - Augmentation of Bongaigaon-Siliguri section of Guwahati- Siliguri
 Pipeline
 
 - Crumb rubber modified bitumen (CRMB) plant at Mathura
 
 - Automation of 1038 retail outlets
 
 On going Projects
 
 - Capacity expansion of Panipat Refinery from 12 to 15 MMTPA
 
 - Naphtha cracker with downstream polymer units at Panipat
 
 - Hydrocracker for improvement in diesel quality and distillates yield
 at Haldia Refinery
 
 - Residue upgradation and petrol/diesel quality improvement project at
 Gujarat Refinery
 
 - Petrol quality upgradation projects at Panipat, Mathura, Barauni,
 Guwahati and Digboi refineries
 
 - Paradip-Haldia crude oil pipeline
 
 - Koyali-Ratlam product pipeline
 
 - Augmentation of Mundra-Panipat crude oil pipeline from 6 to 9 MMTPA
 
 - Dadri-Panipat R-LNG spur pipeline
 
 - Panipat-Jalandhar LPG pipeline
 
 - New depot at Haldwani
 
 - Automation of retail outlets
 
 New Projects
 
 - 15 MMTPA refinery project at Paradip
 
 - High-sulphur crude maximisation project at Barauni Refinery
 
 - Paraxylene project at Gujarat & Haldia refineries
 
 - Coker project at Haldia & Mathura refineries
 
 - Chennai-Bangalore product pipeline
 
 - LPG import facilities at Ennore
 
 - Tap-off point on Koyali-Ratlam pipeline at Bangrod
 
 Six XtraPower service centres were opened near transport hubs to reach
 customers more efficiently.
 
 The retail network was expanded with the commissioning of 1,196 new
 retail outlets, including 727 Kisan Seva Kendra (KSK) during the year,
 taking their total to 17,574, including 2,125 KSKs. To further
 consolidate its leadership in the bulk consumers segment, your
 Corporation commissioned 352 new consumer pumps during the year, taking
 their total to 7,140.
 
 During the year, your Corporation enrolled 33 lakh Indane (LPG)
 customers, and the cumulative Indane population reached 503 lakhs.
 Thirty-six new Indane distributorships were commissioned, raising their
 total number to 4,996. The Corporations LPG bottling capacity
 increased to 4,131 thousand metric tonnes (TMT) per annum with addition
 of 59 TMT capacity during the year. To provide value-added products and
 services to Indane customers, new tie-ups were signed with various
 manufacturers and service providers. A new LPG bottling plant was
 commissioned at Raipur during the year.
 
 Your Corporation achieved a growth of 4.4% in finished lube sales and
 29% in base oil sales as well as 58% growth in lube exports.
 
 IndianOil continues to lead the aviation fuelling business, with a
 market share of 62.6%, meeting the aviation fuel requirements of the
 defence services, national carriers, scheduled private airlines and
 international airlines. During the year, it met the entire aviation
 fuel requirements of the Army, Navy and over 88% of the Indian Air
 Force.
 
 ASSAM OIL DIVISION
 
 The Digboi Refinery of Assam Oil Division (AOD) processed 0.56 MMT of
 crude oil during the year. The Division sold about 1.013 MMT of
 products and retained its position as market leader in the Northeast.
 AODs marketing network comprises 426 retail outlets, 400 Kerosene/LDO
 dealerships and 276 Indane distributorships.  AOD reaches Indane gas to
 18.7 lakh customers in 186 towns.
 
 RESEARCH & DEVELOPMENT
 
 IndianOils Research & Development Centre developed 186 new lubricant
 formulations during the year, out of which 160 were commercialised. The
 Centre filed 18 patents during the year, of which 12 were approved,
 including one US patent. The year was marked with 46 approvals from
 original equipment manufacturers (OEMs).  The in-house developed Needle
 Coke technology was licenced to Numaligarh Refinery Ltd., for the first
 time to a company outside the IndianOil Group. INDMAX, DHDT & ISOM
 technologies, developed by the R&D Centre, were licenced to Bongaigaon
 Refinery & Petrochemicals Ltd. for improving its refining margins.
 IndianOil became the first Indian company to develop Intelligent and
 caliper pigs for gauging the health of cross-country pipelines and
 put them to maiden commercial trial in association with BARC.
 
 IBP DIVISION
 
 The IBP Division, which comprises Explosives and Cryogenics Business
 Groups, sold 42,472 MT of explosives from its 16 plants.  The
 Cryogenics Business Group achieved all time high production of cryo
 containers during the year.
 
 BUSINESS DEVELOPMENT
 
 During the year, business development opportunities continued to
 receive focussed attention and thrust across the entire value chain of
 the hydrocarbon sector. The strategic initiatives were guided by
 IndianOils long-term vision. The year 2007-08 witnessed some major
 achievements.
 
 Exploration & Production
 
 During the year, your Corporation was associated with successful gas
 discovery in the Assam-Arunachal Pradesh block in domestic exploration.
 IndianOil was also involved in the successful discovery of gas in the
 Mahanadi offshore. Subsequently, a detailed evaluation of the available
 data has been carried out to identify the extent of the discovery in
 the block.
 
 IndianOil was associated last year in major oil & gas discoveries in
 Farsi offshore exploration block in Iran. Presently, the commerciality
 report for the find in the block is under preparation. The consortium
 comprising Sonatrach (operator), IndianOil and Oil India Ltd. (OIL)
 were awarded Area 95-96 in December 2007 in the fourth round of bidding
 in Libya.
 
 IndianOil, along with OIL, has formed a joint venture company Ind- OIL
 Overseas Ltd. for acquisition of overseas E&P assets. The company has
 been incorporated at Port Louis, Mauritius.
 
 Petrochemicals
 
 IndianOil, with its continuous focus on strengthening its
 petrochemicals business chain through integration with its core
 competencies, has since emerged as a major player in the market.
 
 Your Corporation has emerged as the most preferred Linear Alkyl Benzene
 (LAB) supplier in the domestic market with two of the biggest buyers
 committing a major portion of their sourcing to the Corporation.
 IndianOil is already the second biggest supplier to Unilever. Globally,
 IndianOils LAB has set its footprint in China, Pakistan and The
 Philippines too during the year, taking its presence to nine countries.
 The entire sale of Purified Terephthalic Acid (PTA) during the year was
 made to domestic customers. Paraxylene produced at Panipat Refinery was
 exported for the first time to Indonesia, Thailand and Malaysia. During
 the year, the Naphtha cracker project with downstream polymer units at
 Panipat achieved significant progress and is expected to be
 commissioned in phases by the end of 2009. In addition, activities
 related to marketing of polymer products have also been geared up. Your
 Corporation is also examining various proposals for production of niche
 high-value speciality petrochemicals.
 
 Bio-fuels
 
 A business plan for entry into the bio-diesel value chain has been
 finalised during the year. In this direction, a major milestone was
 achieved by signing an MoU with the Government of Chhattisgarh for the
 formation of a joint venture company to facilitate bio-diesel
 production on commercial scale. The State Government would be
 allocating a minimum of 30,000 hectares of land to this JV for this
 purpose. Efforts are being made to acquire more arid and waste lands
 from other States.
 
 Natural Gas
 
 During the year, IndianOil commenced supply of regassified LNG (R-LNG)
 to Ratnagiri Gas & Power Pvt. Ltd. and a Gas Sale Agreement has been
 entered into with Pragati Power Corporation Ltd. for supply of 2 mmscmd
 of R-LNG. IndianOil continues to actively pursue city gas distribution
 and is in discussion with various companies for setting up city gas
 distribution networks in various parts of India. To cater to customers
 located away from the gas pipelines, the Corporation has successfully
 commissioned a technology innovation project, viz., LNG at the
 Doorstep for distributing LNG directly to the consumers for industrial
 / captive power applications. The Iran-Pakistan-India gas pipeline
 project is progressing steadily.
 
 Consultancy
 
 During the year, the technical services agreement with Emirates
 National Oil Company, Dubai, was renewed for the 11th consecutive year
 and the manpower secondment agreement for the 10th consecutive year.
 
 INTERNATIONAL TRADE
 
 During the year 2007-08, your Corporation imported crude oil, fuel
 products and lubricants through a carefully selected diversified mix of
 supply sources and also exported petroleum products as detailed
 hereunder:
 
                                         Quantity           Value
                                    (Million Tonnes)    (Rs. in Crore)
 
 Imports
 - Crude Oil                              45.73             106261
 - Petroleum Products                      4.52              13602
 Exports                                   3.33              11422
 
 OPTIMISATION & INFORMATION SYSTEMS
 
 IndianOils ambitious SAP R/3 Enterprise Resource Planning package is
 the largest in Southeast Asia, connecting 690 locations and 5,000
 concurrent users to a common IT platform for online, concurrent
 business transactions. It offers an integrated environment for
 transaction processing across all business functional areas to
 facilitate integration and optimisation of the complex business
 functions across the organisation.
 
 SAFETY, HEALTH & ENVIRONMENT
 
 Your Corporation is committed to conducting business with a strong
 environment conscience for sustainable development, safe workplaces and
 enrichment of quality of life of the employees, customers and the
 community at large. Best procedures and practices of the industry are
 in place at all operating units and installations of the Corporation to
 take care of safety, occupational health and environmental hazards.
 These facilities are periodically reviewed, audited and upgraded for
 continuous excellence. The environment management systems at the
 refineries, pipelines and major marketing installations are certified
 to ISO-14001 standards.
 
 ENERGY CONSERVATION
 
 Your Corporation continued to maintain its thrust on oil conservation
 at all its seven operating refineries through continuous in-house
 process monitoring and keeping abreast of latest technological
 developments. As a result of various energy conservation measures
 undertaken, the energy index in terms of Million British Thermal
 Units/Barrel/Energy Factor of IndianOil refineries during the year
 improved to 67.0 as against 70.6 in the previous year. Similarly,
 energy conservation schemes implemented during the year resulted in
 fuel savings to the tune of about 27,000 MT/year valued at about Rs.35
 crore.
 
 HUMAN RESOURCES
 
 Employee Profile
 
 The Corporations employee strength as on 31st March, 2008 was 31,945,
 including 12,243 officers. There are 2,469 women employees,
 constituting 7.73% of the total manpower.
 
 Industrial relations and employees participation in management
 
 The industrial relations climate in the Corporation remained harmonious
 and peaceful during the year. Cordial relationship and continued
 information sharing with collectives helped in resolving several major
 issues and in obtaining their co-operation for the various initiatives
 taken by the management to optimise manpower positioning and other
 productivity improvement measures, including technological upgradation.
 
 Your Corporations efforts to promote employees participation in
 various activities like Suggestion Scheme, quality circles, welfare,
 safety, total productive maintenance, etc., were continued during the
 year. Quality circles functioning in various units are actively engaged
 in problem-solving activities to improve quality, productivity, cost
 effectiveness and system improvement.
 
 IndianOil has embarked on a long-term programme to institutionalise
 mentoring as a strategy for employee retention and development.  As a
 HR initiative, mentoring helps employees in their personal and
 professional advancements through exposure, visibility, coaching and
 challenging work assignments. The process of weaving mentoring into the
 cultural fabric of your Corporation has commenced taking into
 consideration feedback from mentors and mentees.
 
 Human Resource Development
 
 Your Corporations Human Resources function took a number of
 initiatives during the year in response to the intensifying competition
 for trained manpower. The campus recruitment process was reviewed and
 revamped in line with the changing trends in the job market and to suit
 the new skill sets needed in the changing business scenario.
 Experienced talent was recruited directly at middle level management
 positions in bio-fuels, oil exploration & production and petrochemicals
 to fill skill gaps in new business areas. On the talent management
 side, a comprehensive action plan was drawn up and implemented based on
 the findings of an Employee Engagement Survey. To nurture and develop
 the existing manpower, a series of long-duration training & development
 interventions - both functional and developmental - were carried out
 with focus on building leadership capabilities, strategic orientation
 and skills to suit new businesses.
 
 Faced with the emerging dynamic competitive scenario, IndianOil felt
 the need to revisit its Vision statement so that it truly reflects the
 new goals, aspirations and core values of its people. Keeping this in
 view, it launched a unique re-visioning exercise titled V2 Confluence
 (Vision with Values) to arrive at a new Vision statement.
 
 Presidential Directives regarding representations of SCs and STs
 
 Your Corporation has been meticulously following the Presidential
 Directives and other guidelines issued by the Ministry of Petroleum &
 Natural Gas and the Department of Public Enterprises from time to time
 regarding reservation in services for Scheduled Castes, Scheduled
 Tribes etc.
 
 Liaison officers were carefully chosen and appointed at various units
 all over the country to ensure implementation of Government directives.
 Officials dealing with the subject were provided necessary training to
 enable them to update their knowledge on the subject and perform their
 job effectively.
 
 In accordance with para-29 of the Draft Presidential Directive, a note
 about the Corporations activities which have direct relevance to the
 advancement of SC/ST category of employees along with the statistics
 relating to representation of SCs/STs in the prescribed proforma -
 SC/ST/OBC Report-I and SC/ST/OBC Report-ll is annexed at Annexure-ll.
 
 Status on implementation of Disabilities Act, 1995
 
 Your Corporation has been implementing the provision of 3% reservation
 for physically handicapped and disabled persons diligently.
 
 Welfare of weaker sections
 
 The Presidential Directives and various instructions / guidelines
 issued by the Government of India regarding reservation in services for
 various categories of personnel were scrupulously followed.
 
 It has been the endeavour of your Corporation to utilise 25% of
 community development funds towards the Special Component Plan (SCP)
 and Tribal Sub Plan (TSP) for meeting the needs of the weaker sections.
 
 Sports
 
 Your Corporation continued the Sports Scholarships Scheme launched last
 year for promising young sportspersons with a view to encourage talent
 and create a pool of sportspersons. It also continued its policy of
 nurturing internal talent in sports. Three players of IndianOil, viz.,
 Wasim Jaffer, Rohit Sharma and Rajesh Pawar
 
 represented India in international test cricket and one-day cricket
 series. Nine hockey players of IndianOil were selected to represent
 India in the International tournaments and were also members of the
 Indian team which won the Asia Cup. Yogesh Pardeshi became the national
 world carrom champion. Sharat Kamal, the national table tennis
 champion, has been selected to represent India in the forthcoming
 Olympics. Rohan Bopanna represented India in the Davis Cup and Hopman
 Cup tennis tournaments. S.S.Ganguly won the National Chess Championship
 for the fifth time.
 
 Corporate Social Responsibility (CSR)
 
 IndianOil believes in fostering and strengthening corporate-civil
 society partnerships. With its nation-wide presence, it actively seeks
 to network and forge partnerships with NGOs, government bodies,
 district authorities, village panchayats, etc., in and around its major
 installations to improve the quality of life of the local communities.
 The wide range of CSR initiatives include provision of potable water,
 health & medicare and education.
 
 As a founder member, your corporation continued its support to the
 United Nations Global Compact programme in implementing the 10 guiding
 principles of the agenda on human rights, labour standards, environment
 and anti-corruption.
 
 Based on the recommendations of the CSR Committee of the Board, it is
 proposed to constitute a separate trust for implementing IndianOils
 CSR activities in focussed areas of skill development and education.
 
 IndianOil Scholarships
 
 During the year, scholarships were awarded to 450 meritorious students
 from economically weaker sections of society pursuing 10+/ITI and
 professional courses in Engineering, Medicine and Business
 Administration/Management disciplines. 50% of the scholarships are
 reserved for SC/ST/OBC students and 25% of the scholarships in each
 category are earmarked for girl students and 10% for physically
 handicapped students.
 
 Hindi Implementation
 
 In compliance of the Official Language Act, 1963, Official Language
 Rules, 1976 and orders issued by the Government of India from time to
 time, efforts were continued during the year for increasing the
 progressive use of Hindi in official work. Official Language
 Implementation Committees functioning at IndianOil units regularly
 review the progress of implementation of official language policies and
 the annual programme as circulated by the Department of Official
 Language, Ministry of Home Affairs.
 
 Foreign Tours
 
 IndianOil officers undertook a total of 669 foreign tours during 2007-
 08 for business purposes and for attending conferences, seminars and
 training programmes. The total expenditure on foreign tours was Rs.
 10.53 crore.
 
 VIGILANCE
 
 During the year, IndianOils Vigilance Group conducted a number of
 training courses, workshops and awareness programmes for the benefit of
 the employees. A Vigilance Awareness Week was celebrated throughout the
 Corporation in November 2007. As a part of preventive vigilance,
 special emphasis was laid on system studies aimed at making the system
 transparent.
 
 REMUNERATION TO THE AUDITORS
 
 The Auditors remuneration for the year 2007-08 was fixed at Rs. 60
 lakh plus applicable service tax. In addition to this, reasonable
 out-of-pocket expenses actually incurred are also reimbursable.
 
 ENTERTAINMENT EXPENSES
 
 The entertainment expenses for the year 2007-08 were Rs.1.80 crore.
 
 MERGER
 
 Bongaigaon Refinery & Petrochemicals Ltd. (BRPL)
 
 The Shareholders and Creditors of both IndianOil and BRPL have accorded
 approval to the Scheme of Amalgamation, including the swap ratio of
 4:37, i.e., 4 fully paid equity shares of Rs.10/- each of IndianOil for
 every 37 fully paid equity shares of Rs.10/- each of BRPL. As per the
 guidelines applicable to Government companies, the Scheme of
 Amalgamation has been submitted to the Ministry of Corporate Affairs,
 and its approval is awaited.
 
 SUBSIDIARIES
 
 The Corporation has the following subsidiaries, whose financial
 performance for 2007-08 is as under:
 
                                                         (Rs. in Crore)
 Subsidiary                        Total         Net          Dividend
                                Turnover      Profit            (%)
 
 Chennai Petroleum
 Corporation Ltd.                  32889        1123            170
 Bongaigaon Refinery
 & Petrochemicals Ltd.              6645         294             50
 IndianOil (Mauritius) Ltd.          535          14
 Lanka IOC Ltd.                     1720          90
 IndianOil Technologies
 Ltd.                               2.06        0.97             50
 IOC Middle East FZE               40.73        2.08
 
 REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN
 EXCHANGE EARNINGS
 
 In accordance with the Companies (Disclosure of Particulars in the
 Report of the Board of Directors) Rule, 1988, a report on Energy
 Conservation, Technology Absorption and Foreign Exchange earnings is
 annexed at Annexure-I.
 
 PARTICULARS OF EMPLOYEES
 
 The particulars of employees pursuant to Section 217(2A) of the
 Companies Act, 1956 and rules framed thereunder, are annexed hereto.
 
 BOARD OF DIRECTORS
 
 Shri Vineet Nayyar, Independent Director, ceased to be a Director of
 IndianOil on 30th April, 2008. Prof. S.K. Barua, Shri V.K. Agarwal,
 Shri V. Ranganathan and Shri P.M. Sinha, all Independent Directors,
 ceased to be Directors of IndianOil on 31st May, 2008.
 
 Shri Anees Noorani, Dr. (Smt.) Indu Shahani, Prof. Gautam Barua, Shri
 Michael Bastian and Shri N.K. Poddar were appointed as Independent
 Directors of the Corporation with effect from 1st June, 2008.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956 with respect to Directors Responsibility Statement, it is
 hereby confirmed:
 
 (i) that in the preparation of the annual accounts for the financial
 year ended 31st March, 2008, all applicable accounting standards had
 been followed along with proper explanations relating to material
 departures;
 
 (ii) that the Directors had selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Corporation at the end of the financial year and of
 the profit or loss of the Corporation for the year under review;
 
 (iii) that the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Corporation and for preventing and detecting fraud and other
 irregularities;
 
 (iv) that the Directors had prepared the accounts for the financial
 year ended 31st March, 2008 on a going concern basis.
 
 ACKNOWLEDGEMENTS
 
 The Board of Directors hereby records its deep appreciation of the
 valuable services and dedicated efforts of the members of the IndianOil
 family in the Corporations achievements during the year 2007-08. The
 Board also wishes to thank the Government of India, particularly the
 Ministry of Petroleum & Natural Gas, and the various State Governments,
 regulatory and statutory authorities for their valuable guidance and
 support. The Board is also grateful to the Corporations bankers,
 investors, customers and vendors for their continued support and
 confidence reposed in the Corporation.
 
 The Board of Directors also wishes to place on record its appreciation
 of the significant contributions and valuable services rendered by Shri
 Vineet Nayyar, Prof. S.K.Barua, Shri V.K.Agarwal, Shri V.Ranganathan
 and Shri P.M.Sinha, Independent Directors, during their tenure on the
 Board of IndianOil.
 
                                         For and on behalf of the Board
 
                                                 (S. BEHURIA)
                                                   Chairman
 Place : New Delhi
 Dated : 12th August, 2008