Hindustan Petroleum Corporation Ltd

DEAR MEMBERS,

On behalf of the Board of Directors, it gives me immense pleasure in presenting this Report on the performance of your Corporation for the financial year ended March 31,2024.

Financial Year 2023-24 has been a year of exceptional performance for the Corporation, demonstrating strength across both physical and financial parameters. On physical front, crude thruput reached a record high of 22.33 MMT, representing a significant 17% increase compared to the previous year. This achievement was further complemented by record-breaking sales of 46.82 MMT, reflecting an impressive growth of 8% over previous year. On financial front, your Corporation's profitability also soared to new heights, reaching a record-breaking standalone PAT of H 14,693.83 Crore.

HIGHLIGHTS

SALES/INCOME FROM OPERATIONS

Your Corporation has achieved Sales/Income from Operations of H 4,59,815.32 Crore in the financial year 2023-24 as compared to H 4,64,683.79 Crore in the financial year 2022-23 on a standalone basis.

PROFIT / (LOSS)

Your Corporation has reported Earnings before Interest, Tax, Depreciation & Amortization and Impairment (EBITDA) of H 27,221.16 Crore in the financial year 2023-24 as against H (5,453.09 Crore) in the financial year 2022-23 and Profit/(Loss) for the year (PAT) of H 14,693.83 Crore in the financial year 2023-24 as compared to H (8,974.03 Crore) in the financial year 2022-23 on a standalone basis.

DIVIDEND

Your Corporation has paid an interim dividend of H 15/- per share [amounting to H 2,127.82 Crore] during the financial year 2023-24. The Board of Directors, after taking into account the Financial Results of the Corporation for financial year 2023-24, has recommended a final dividend of H 16.50/- per share (pre-bonus) [amounting to H 2,340.60 Crore], thereby, taking total dividend to H 31.50/- per share (pre-bonus) [amounting to H 4,468.42 Crore] for the financial year 2023-24. The aforesaid dividend is out of profits earned for the financial year 2023-24. Your Corporation had not declared any dividend during the financial year 2022-23.

BONUS ISSUE

The Board of Directors has also recommended the issuance of bonus equity shares in the ratio of 1 equity share of H 10/- each for every 2 equity shares of H 10/- each held, subject to approval by the members of the Corporation. Considering the issuance of bonus shares, as recommended, the final dividend of H 16.50/- per share (pre-bonus) translates into final dividend of H 11/- (post-bonus) per share having face value of H 10/-.

INTERNAL RESOURCES GENERATION

Your Corporation has generated Internal Resources (net of dividend payout) of H 22,028.67 Crore during the financial year 2023-24 as compared to H (9,524.80 Crore) during the financial year 2022-23 on a standalone basis.

CONTRIBUTION TO EXCHEQUER

Your Corporation has contributed a sum of H 97,989.87 Crore to the exchequer during the financial year 2023-24 by way of duties and taxes, as compared to H 92,204.21 Crore during the financial year 2022-23 on a standalone basis.

REFINERY PERFORMANCE

In the financial year 2023-24, your Corporation's Mumbai and Visakh Refineries demonstrated exceptional performance in their refining operations, showcasing an impressive improvement. A significant milestone was achieved by the refineries, as they recorded the highest-ever refining thruput of 22.33 MMT. The Visakh Refinery achieved a remarkable feat by processing the highest-ever yearly crude of 12.69 MMT, which includes a successive highest ever quarterly crude processing. The Mumbai Refinery also exhibited excellent performance by processing a crude thruput of 9.64 MMT. These exceptional accomplishments contributed to the production of the highest-ever volumes of MS, HSD, and LPG, LOBS during the financial year 2023-24.

Your Corporation's Refineries surpassed their design capacity and registered an average capacity utilization of103.3%, notwithstanding the turnarounds in both Mumbai and Visakh Refineries.

Your Corporation's Refineries adaptability soared to new heights as we embraced new opportunity crudes and processed 7 new grades of crude for the first time. Visakh Refinery has also started using the new crude storage capacity (300 TMT) in Cavern-A for Refinery consumption after signing of agreement with Indian Strategic Petroleum Reserves Limited (ISPRL). This initiative is to bring the benefit of freight economics by accommodating higher capacity cargo and also help in meeting challenges arising from unfavorable weather conditions, leading to non-berthing of Vessels at SPM.

During the financial year, 5 new grades were added to the Corporation's crude basket, which now includes 157 grades from various regions such as West Africa, Middle East, North America, South America, Mediterranean, North Sea, Far East, Russia and India.

India's energy demand is set to grow exponentially, driven by its rapid economic growth. The rising demand for road transport fuels further adds to this increasing trend. To meet this surge in demand, we are actively modernizing and expanding our refineries.

Visakh Refinery Modernization Project (VRMP) was dedicated to the Nation by Hon'ble Prime Minister of India in March 2024. This significant initiative aligns with our mission for a 'Viksit Bharat' - a developed India. Your Corporation has showcased commendable commitment to successfully execute large-scale projects that contribute to India's energy security. The evident focus on innovation and environmental responsibility in every facet of this project reinforces our collective commitment to a more resilient and sustainable energy landscape.

Accomplishing the Project at an investment of approximately H 26,000 Crore, VRMP is the biggest investment in oil sector in the east coast and stands as a testament to your Corporation's commitment to enhancing product availability and contributing significantly to the region's energy security. The first of its kind Residue Upgradation Facility (RUF) in India, a pioneering unit under this project, exemplifies India's ascent in bottom upgradation technology. The project features state-of-the-art facilities, the first of its kind technology of Resid upgradation technology, the largest single capacity train in India of hydrogen generating unit and the highest-capacity Full Conversion Hydrocracker Unit in India.

Your Corporation's Mumbai Refinery signed agreement with Mumbai Port Authority for land lease for 30 years for construction of Crude Oil Terminal (COT) project. Pre-project & Engineering are completed & Site clearance activities are in full swing at Mumbai Refinery for future projects such as Solvent De-Asphalting & Integrated Hydrocracker Catalytic De-waxing Unit.

India's first integrated Grassroot Refinery cum Petrochemical complex is being set up by HPCL Rajasthan Refinery Limited (HRRL), a joint venture company between your Corporation and the Government of Rajasthan, at Pachpadra in Balotra district of Rajasthan. HRRL Project is your Corporation's biggest investment till date and is currently biggest project under implementation in India. HRRL Refinery cum Petrochemical Complex boasts of having highest Petrochemical Intensity Index of 26% in India with flexibility in switching between Fuel & Petrochemical products on account of price fluctuations/market demand. Refinery complex is designed and slated to be in Quartile 1 position from Day 1 of stable operation. HRRL achieved financial closure for the 9 MMTPA Integrated Grass Root Refinery cum Petrochemical Project. Project is at advanced stage of construction and Pre-commissioning activities of three of the units have been initiated.

The completion of these projects and new business initiatives will mark a significant step in optimizing the refining processes, versatility and capacity to meet diverse market demands, reducing the environmental footprint, and fulfilling the national priorities of energy accessibility, affordability, security and sustainability.

Your Corporation stands fully committed to the principle of sustainability and aims to make its existing Refinery operations and future expanded operations Net Zero by 2040 and has adopted a multi-pronged approach to achieve the same by focusing on using low carbon/ renewable fuels such as natural gas, renewable power, CBG and green hydrogen along with the focus on increasing energy efficiencies.

Energy conservation and enhancing energy efficiency allows Refineries not only to reduce operational costs but also minimizes environmental footprint and contributes to sustainable development. By adopting strategies such as process optimization, advanced control systems, energy recovery, equipment upgrades, renewable energy integration, and employee engagement, Your Corporation's Refineries have unlocked substantial energy savings, and reduced emissions.

The particulars with respect to conservation of energy, technology absorption, imported technology, research & development expenditure, foreign exchange earnings & outgo are furnished in

Annexure I. The particulars relating to control of pollution and other initiatives by Refineries are furnished in Annexure II.

OPERATING PERFORMANCE OF REFINERIES

MARKETING PERFORMANCE

Your Corporation recorded the highest ever sales of 46.82 MMT in financial year 2023-24, including exports (2022-23: 43.45 MMT). In the domestic segment, your Corporation recorded the highest ever sales volume of 44.67 MMT (2022-23: 42.19 MMT) with a YoY growth of 5.88% and achieved a market share gain of 0.47% amongst Oil PSUs.

In the motor fuel segment, your Corporation achieved the highest ever sales volume of 27.89 MMT in financial year 2023-24 with a market share gain of 0.11% in Total Motor Fuels on Industry basis. During the financial year 2023-24, 836 new Retail Outlets were commissioned taking the total retail network to 22,022 numbers. As part of the energy transition process, your Corporation is in the forefront to provide alternate fuels and EV Charging Systems (EVCS) at its retail network and make them Energy Stations. During the financial year 2023-24, CNG facilities were added at 303 Retail Outlets, taking the total to 1,690, and EVCS were added at 1,746 Retail Outlets, taking the total to 3,603.

Introducing the innovative branded retail concept 'HaPpyShop', your Corporation opened 367 Happy Shops during the financial year 2023-24, augmenting the total count to 427.

Further, towards increasing market penetration, your Corporation secured 24 Wayside Amenity (WSA) sites through successful bids from National Highway Logistics Management Limited (NHLML) & State PSU tenders, totaling to 49 since 2021. Notable achievements included a market share gain of 0.97% in the Highway segment and an outstanding success rate of 38.6% in securing WSA tenders for financial year 2023-24.

Further, your Corporation has taken several pioneering initiatives, such as the establishment of Dealer Owner Dealer Operated (DODO) category Direct dealerships and coalition loyalty programs, underscoring its commitment to innovation and customercentric solutions.

Especially, the DriveTrack Plus program garnered accolades for its technological advancements and successful migration, receiving prestigious awards including the CII DX Award 2023 and recognition for "Best Technology Transformation" at the Chief Data and Analytics Officer Conclave & Awards 2023.

Towards low carbon economy, solar panels were installed at 7,143 Retail Outlets during the financial year 2023-24, taking the total number of Retail Outlets with solar power to 17,618 which accounts for around 80% of the total retail network.

In LPG business vertical, your Corporation has set a new record with highest ever sales of 8.56 MMT, registering a growth of 5.5% over the previous year which is highest amongst the Industry. 'HP Gas' has enrolled over 28 lakhs new customers during the financial year 2023-24 which includes 18 lakhs customers under 'Pradhan Mantri Ujjwala Yojna (PMUY 2.0)'. To meet the growing LPG demand, your Corporation has commissioned 2 LPG Plants during the financial year 2023-24, each of 120 TMTPA capacity at Abu Road and Varanasi. Your Corporation sustained its leadership position in the Free Trade LPG (FTL) segment, selling over 7.3 million 'APPU' cylinders and achieving a market share of over 44%. Your Corporation has commissioned 66 new domestic LPG distributors, taking the total numbers to 6,349. Your Corporation has conducted several health and safety campaigns, including over 976 Sadak Suraksha Camps for LPG transporters and crew.

Your Corporation commenced marketing of packaged drinking water 'HP PAANI' through LPG marketing channel. Further, Electric Vehicles (EVs) were added to LPG ARB product-line to facilitate transition of LPG logistics infrastructure of LPG Distributors to EVs.

Largest LPG cavern of capacity 80 TMT is being set up at Mangalore. The progress of the project is well on track and will be commissioned as per schedule during financial year 2024-25.

In the Lubricant segment, your Corporation has recorded an overall sales volume of 652 TMT of lubricants during financial year 2023-24, and exported lubricants more than 4 TMT across 13 countries. Your Corporation has achieved the highest ever sales to countries in the Middle East region and Africa via its Dubai based wholly owned subsidiary. Your Corporation's long term Trademark Licensing Agreement signed with the Chevron Corporation during the previous year began to bear fruit, when the flagship products of Caltex brand were launched in Mumbai in a glittering ceremony, followed with sustained brand promotion with Out-of-Home (OOH) & print media over the next few days. These products are being used as complementary offerings to our existing product portfolio in the highly competitive automotive aftermarket segment.

Your Corporation continued to put strong focus on Original Engine / Equipment Manufacturers (OEMs) and its customers from core sectors. The geographical reach of the marketing network has been enhanced by adding 77 new Channel Partners in India, South Asia & South East Asia. The commercial production and sales of Diesel Exhaust Fluid (DEF) was scaled up for third year in a row, recording highest ever sales of around 31 TMT during the financial year 2023-24.

The Lubricant business continued to be benefitted immensely from the close interactions between OEMs and R&D / Technical Services teams of your Corporation with stakeholders. Close to 900 customer connect activities in physical form were conducted during the financial year 2023-24. Digitalisation of loyalty program started showing positive impact with number of unique users crossing a million mark. Your Corporation remained a major producer of base oils in the country with capability of producing Group-I, Group-II and Group-III base oils. It also made significant progress in improving operational efficiencies at lube blending plants by infrastructure augmentation, automation and various other innovative solutions.

In the Industrial and Consumer (I&C) business, your Corporation recorded overall sales of 5.39 MMT. HPCL's strategy of maximizing sales in Diesel (HSD), Furnace oil (FO), and Bitumen was successful, with each product exceeding 1 MMT in sales volume. Also, highest ever sales of 27.2 TMT was recorded in Hexane. In Low Sulfur Heavy Stock- Premium (LSHS-P), it achieved a sales volume of 63 TMT, registering a remarkable growth of 65.5% compared to the previous year.

During the financial year 2023-24, your Corporation has commissioned five Railway Consumer Depots (RCDs), which have been implemented on Total Fuel Management (TFM) model. This will further strengthen your Corporation's long-standing relationship with Indian Railways. The TFM manages the entire chain of fuel management including product received in bulk tanks, storage safekeeping and fueling of locomotives including the inventory management with effective usage of technology. Infrastructure continues to be the key strength of your Corporation in delivering products efficiently and at competitive prices to customers. During the financial year 2023-24, your Corporation has commissioned the Light Diesel Oil (LDO) rake unloading facility at Mangalore and Black Oil rake unloading facility at Kandla. Your Corporation has also moved a record 160 TMT of Bitumen using our coastal vessel.

In the Aviation business, your Corporation has achieved ATF sales of 878 TMT during financial year 2023-24, registering a growth of 26.8% over the previous year. During the financial year 2023-24, your Corporation has inaugurated its latest ASF in Ayodhya and ATF Tank Facility at Akola New-IRD and Srinagar IRD. Additionally, HP Aviation fueled the inaugural Air Force test flight at Ayodhya Maharishi Valmiki International Airport. Furthermore, Kolkata ASF received a Silver Rating in Green-co Certification for its environmental efforts during financial year 2023-24.

In the petrochemical business, your Corporation has started pre marketing of HP DURAPOL? brand. This pre marketing will be the pre-cursor to your Corporation's investment in HRRL, a 9.0 MMTPA Fuels and 2.4 MMTPA Petrochemicals Complex. The HP DURAPOL? brand encompasses various grades of essential plastics: High-Density Polyethylene (HDPE), Linear Low-Density Polyethylene (LLDPE), and Poly Propylene (PP).

Through HP DURAPOL?, your Corporation aims to cater to diverse customer segments across India. These products will find application in various end-use sectors, including food packaging, agriculture, textiles, households, fertilizers, and more.

During the financial year 2023-24, 45,562 MT of Polymers were sold and 550 customers were added. Your Corporation took various initiatives in creating Sustainable Ecosystem with 100% Recycle plastic tiles at Retail outlet (M/s. B U Bhandari, Pune) & Trash to Treasure Plastics waste in Bitumen Road stretch at HP Nagar West Colony, thus reducing the Carbon footprints.

In the Gas business, your Corporation has marketed 446 TMT of Natural Gas, strengthening its presence in this business segment. Your Corporation is actively participating in the establishment of City Gas Distribution (CGD) networks, both on its own and through various joint ventures. Along with its four joint venture companies, HPCL has the authorization to set up and operate CGD networks in 25 Geographical Areas (GAs) in 14 States. During the 12^th round of PNGRB bidding, HPCL, on a standalone basis, secured the authorization for setting up the CGD network in the Sikkim Geographical Area, while its JV, HP OIL Limited, secured the authorization in the Nagaland Geographical Area.

During the financial year 2023-24, your Corporation has commissioned 119 new CNG stations in the GAs authorized to it, taking the total number of CNG stations in authorized GAs to 328. Additionally, 2,636 inch-km of steel pipeline, 1,107 KM of MDPE pipeline was added and 28,721 new PNG connections were released during the financial year 2023-24. Your Corporation is also operating a network of one mother station and 18 daughter booster stations in and around the city of Ahmedabad.

For import and regasification, your Corporation is building a 5 MMTPA LNG Regasification Terminal at Chhara Port in Gujarat through its wholly owned subsidiary, which has been mechanically completed in this year.

Your Corporation has supplied 379 TMT of Natural Gas during the financial year 2023-24. To ensure a reliable supply for both internal use and external sales, your Corporation sources Natural Gas through various contracts. These include a long-term agreement for gas from ultra-deep-water fields in the KG Basin, along with other domestic sources.

Marking a significant milestone, your Corporation successfully commissioned its first Liquefied Natural Gas (LNG) dispensing station at a retail outlet in Oran, Sabarkantha District, Gujarat. Sales from this station have already begun. Additionally, mechanical construction has been completed for 3 more LNG dispensing Stations at Ajmer, Satara and Prayagraj.

Supply, Operations & Distribution - Strategic Business Unit (SOD SBU) of your Corporation ensures efficient distribution and marketing of petroleum products across India by utilizing its robust infrastructure of 78 terminals and depots. SOD SBU achieved an all-time high thruput of 59.3 MMT in financial year 2023-24 with a growth rate of 3.5% against historical and ensured uninterrupted product availability throughout the country.

In line with Ethanol Blending program of MOPNG, your Corporation achieved an overall ethanol blending of 12.00% in petrol during the financial year 2023-24 surpassing the historical rate of 10.59% and reduced Green House Gas (GHG) emissions by 31 Lakh MT.

Your Corporation signed MOU with Step One Tech Limited for retrofitting old vehicles with e-flex Fuel Kits for compatibility up to 85% ethanol-blended petrol. It became first OMC to implement 100% Bio Diesel to run existing DG sets at 35 locations, resulting direct reduction of CO2 by 70% compared to GHG emissions if run by only Diesel.

Your Corporation remains committed to sustainability. During the financial year 2023-24, the total installed solar power capacity at SOD locations reached 10.7 MW generating approximately 97.37 lakhs units of power for captive consumption. Vapour Recovery System (VRS) was installed at 3 supply locations during the financial year 2023-24, taking the total number to 46 locations as of 31^st March 2024.

Your Corporation has mitigated Scope 1 and scope 2 emissions at 10 SOD locations and are being taken up for Net Zero certification in line with the Corporation's target to achieve Net Zero locations by 2030.

Your Corporation undertook various measures to enhance safety in all facets of operations. GreenCo rating certifications were obtained for 18 locations (1 - Platinum, 5 - Gold, 9 - Silver, 3 - Bronze) in the financial year 2023-24. Further, your Corporation has imparted simulation based defensive driver training to Tank Truck Crew, inculcating Visual, Aural and Kinesthetic approach to road safety through customised driving scenarios on rough weather and difficult terrain.

Your Corporation's pipeline vertical has laid special emphasis in acquiring high level of competency in execution of pipeline projects and managing the pipeline operations effectively to optimise cost and enhance efficiencies. It is now operating 5,132 KM long Pipeline Network with mainline capacity of 35.2 MMTPA. During this year, 215 KM long Barmer-Palanpur Pipeline Project with a capacity of 6 MMTPA costing H 764 Crore was mechanically completed.

The pipeline vertical has achieved an all-time high annual thruput of 25.83 MMT registering a year-on-year growth of 11.1%.

Through various cost optimization initiatives, your Corporation's Pipeline vertical has improved performance and emerged best in the Industry in the Solomon Global Benchmarking of Manageable Non-Volume Expenditure (MNVE), improving its ranking to the top 6^th percentile worldwide, vis-a-vis its position in the top 11^th percentile observed in the previous study cycle.

To further expand the pipeline network and capabilities, new Pipeline projects are under execution with an estimated investment of about H 1,400 Crore namely Bathinda Sangrur Pipeline (88 KM,

1.4 MMTPA) and Haldia Panagarh Pipeline (201 KM, 1.45 MMTPA). These projects will increase the Mainline capacity to 42.65 MMTPA and network length to 5,638 KM, thus, significantly strengthening your Corporation's position in key markets. Your Corporation has also teamed up with IOCL and BPCL in development of India's longest LPG pipeline from Kandla to Gorakhpur (2,805 KM) through joint venture route.

Towards environmental protection and energy security of the nation, your Corporation is promoting biofuels in a big way. Your Corporation has achieved substantial progress in constructing its first Second-Generation Ethanol bio refinery at Bathinda, Punjab with production capacity of 100 KL per day of ethanol from biomass. It is also putting up a 1G Ethanol Plant in Himachal Pradesh in Collaboration with Govt. of Himachal Pradesh.

Your Corporation commenced commercial sale at its first Biomass- based Compressed Biogas (CBG) Plant of 14.2 Tons Per Day (TPD) capacity at Budaun, Uttar Pradesh, using rice straw as feedstock. Additionally, construction is in progress for a Phosphate Rich Organic Manure (PROM) plant which will convert part of the organic manure to 'Phosphate Rich Organic Manure' to have better economic returns. CBG produced from the Plant is being sold through retail outlets.

Your Corporation has also set up a CBG plant of 100 TPD of Cow dung processing capacity under the CSR scheme at Pathmeda, Rajasthan. Further, it has also set up a waste to biogas plant at its Yerada Park Housing colony at Visakhapatnam, Andhra Pradesh. This plant will utilize the Segregated food, vegetable waste, Horticulture & Garden waste to produce gas to be utilized in the Canteen Kitchen.

Your Corporation is actively participating in Government of India's Sustainable Alternative Towards Affordable Transportation (SATAT) initiative for promotion of CBG. During the financial year 2023-24, under the SATAT scheme, your Corporation commissioned 5 numbers of CBG Plants with total capacity of 26.1 TPD CBG, taking the total to 9 Plants with total capacity of 54.65 TPD. Further, your Corporation has issued 20 new LOIs for CBG plants with CBG production capacity of 112.5 TPD in financial year 2023-24 taking the total number of active LOIs to 107 with total capacity of 606.6 TPD.

During financial year 2023-24, your Corporation has sold 338.6 MT CBG through its dedicated CBG Retail Outlets against historical CBG sales of 77.3 MT registering 338% growth.

Mega Workshop on CBG/SATAT under aegis of MOPNG was organised at Lucknow on 29^th February 2024 for bankers, LOI holders and CBG plant owners which was attended by senior officials of MOPNG, Dept. of Drinking Water and Sanitation (Ministry of Jalshakti), Dept. of Financial Services (Ministry of Finance), Dept. of Fertilizers (Ministry of Chemicals & Fertilizers), Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA), Indian Biogas Association (IBA), World Bank and Technology providers amongst others.

In order to give impetus to your Corporation's green energy plans, HPCL Renewable & Green Energy Ltd. (HPRGE), a wholly owned subsidiary, has been created which will manage the new portfolio of green energy businesses such as biofuels, renewables, green hydrogen, carbon offsets, green mobility, and alternative energy businesses. HPRGE has been incorporated on 19^th January 2024.

Your Corporation is actively harnessing Renewable Energy sources to reduce the carbon footprints and electricity cost across the value chain and is continuously expanding the wind and solar power generation capacities. During financial year 2023-24, your Corporation has installed captive solar power capacity of 22.9 MWp across various locations, taking the total solar power capacity to 107.3 MWp as of 31^st March 2024.

Your Corporation has also set up wind power capacity of 100.90 MW, which generated about 18.45 Crore kWh of electricity during financial year 2023-24 resulting in emission mitigation of 151.3 thousand metric tonnes of carbon dioxide equivalent.

During the financial year 2023-24, your Corporation through its fully owned subsidiary HPRGE has mechanically completed 5 MW (AC) / 6.5 MWp (DC) Solar Power Project at Jhansi in Uttar Pradesh and 6 MW AC Solar Power Project at Panipat in Haryana. Further, HPRGE has also embarked on the journey to create its first Mega Solar Project of 100 MW Capacity located at Galiveedu in Andhra Pradesh.

TREASURY MANAGEMENT

Your Corporation has successfully reduced its borrowing during the financial year 2023-24 as compared to the previous year, thanks to improved operational profits. Your Corporation continues to invest heavily on capital projects which have been predominantly funded through internal resources.

While the interest rates globally continued to remain high, the existing long-term loans aggregating to H 15,000 Crore (both INR and foreign currency) were refinanced at lower interest rates, resulting in significant reduction in finance cost, going forward.

Aligning with its ESG objectives, your Corporation entered into the realm of Green Financing, securing loans amounting to H 300 Crore to advance its green and renewable energy projects. Additionally, as a part of Government of India's Asset Monetization Program, your Corporation successfully mobilized funds amounting to H 1,453 Crore through the securitization of future SSLF cashflows from retail outlets.

Utilizing a diverse mix of financial instruments, your Corporation has effectively managed its working capital costs. Short-term borrowing needs were met through Triparty Repo System, Clearcorp Repo Order Matching System, Revolving Line of Credit in USD, and various working capital facilities from banks.

As of March 2024, your Corporation continues to command international long term issuer rating of "Baa3" with "Stable" outlook from Moody's Investors Services, and "BBB- "with "Stable" outlook from Fitch Ratings. Both ratings are at par with sovereign rating.

Your Corporation also continues to command the highest domestic rating for long-term and short-term facilities, with a "AAA" rating and "Stable" outlook and an "A1+" rating respectively from CRISIL, India Rating and Research Limited and ICRA.

INTERNAL FINANCIAL CONTROLS

Your Corporation has adequate Internal Financial Controls for ensuring the orderly and efficient conduct of its business including adherence to the Corporation's policies; the safeguarding of its assets; the prevention and detection of frauds and errors; the accuracy and completeness of the accounting records and the timely preparation of reliable information, commensurate with the operation of your Corporation. As part of this exercise, the design of internal controls and its operating effectiveness for the key business processes is tested by external consultant who observed that there are no material weaknesses in Internal Controls over Financial Reporting.

RISK MANAGEMENT POLICY

We operate in a dynamic environment which not only provides opportunities but also exposes the business to various internal and external risks. Your Corporation recognizes that all facets of its business involve significant risks and that its actions are increasingly exposed to greater scrutiny by the public, regulators, investors, and other stakeholders. To proactively identify and manage key risks for achieving our strategic objectives and enable the Corporation to deal with these enhanced business challenges and risks, an effective and pragmatic risk management framework has been institutionalized across the organization. Your Corporation has fortified its Enterprise Risk Management (ERM) framework by incorporating the best practices recommended by internationally recognised standards such as COSO ERM 2017 and ISO 31000:2018. ERM Policy encompasses a comprehensive array of risks that could impact our strategic objectives and overall performance, including operational, regulatory, financial, sectoral, strategic, sustainability in particular ESG (Environmental, Social and Governance), information and cyber security related risks and business continuity plan. The objective is to integrate risk identification and management in the day-to-day operations of the business, wherein risk is continuously identified, assessed, monitored, graded and managed to an acceptable level. Your Corporation has engaged reputed external consultant to provide additional perspective and support the ERM processes.

A systematic process of periodic risk reviews is in place across all Strategic Business Units (SBUs) and Functions. The Risk Management Committee meets periodically, at least twice in a year, to ensure that appropriate methodology, systems and processes are in place to review these risks as well as monitor the progress of implementation of various mitigation measures. The Board is also updated regularly on the risk review and mitigation measures of the identified risk.

VIGILANCE

The Vigilance mechanism in your Corporation is based on the directives issued by the Central Vigilance Commission (CVC), Department of Personnel & Training (DoPT) and Ministry of Petroleum & Natural Gas (MoPNG) from time to time.

The Vigilance Department is headed by the Chief Vigilance Officer (CVO) who administers supervision and control of all the Vigilance matters in the Corporation. Vigilance Department carries out focused preventive vigilance activities which help in ensuring transparent business decisions by respective Departments.

Apart from conducting preventive vigilance activities, the major work areas of Vigilance comprise of investigation of complaints received from various sources like Citizens, Stakeholders, Central Vigilance Commission, Ministry of Petroleum & Natural Gas, Management and other sources etc.

The Vigilance Department deals mainly with matters related to corruption and matters having 'Vigilance angle' as per Vigilance Manual (Updated 2021). The complaints are handled as per the complaint handling policy stipulated in the Vigilance Manual (Updated 2021) of the Central Vigilance Commission. There were 953 complaints disposed off during the current financial year and 18 complaints are pending as of 31.03.2024. These cases are related to retail outlet selection, retail outlets operations, LPG distributorship selection, LPG distributorship operations, tendering, transportation, depot/plant operations etc.

Various operating areas were reviewed for systemic improvements during the year. Apart from investigating complaints, surprise inspections of Depots, Terminals, LPG Plants, Regional Offices, LPG Distributors, Retail Outlets, Tank Trucks, Major Works (CTE Patten), Tender Review etc. were carried out. Various focused grouptraining programs were conducted for employees.

Vigilance Awareness Week was observed under the central theme for the year "Say no to corruption; Commit to the Nation".

Various outreach activities viz., focused group presentations, Quizzes, Drawing/Painting Competitions, Skits/street plays, Workshop, Technical talks, Grievance redressal camps/ Awareness Gram Sabhas, Rallies/Walkathons, School/ College Programs etc. were undertaken during the week to spread awareness among citizens/ stakeholders and employees.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Corporation, being a Government Company, is subjected to the CVC Guidelines and has a separate Vigilance Department administering the Vigilance matters. Your Corporation has a Whistle Blower Policy approved by the Board and the same is

placed on the website of the Corporation. The web link of Whistle Blower Policy is stated herein below:

Web link: https://www.hindustanpetroleum.com/documents/pdf/ Whistle Blower Policy.pdf

RIGHT TO INFORMATION (RTI)

Your Corporation being a Public Authority complies with the provisions of the Right to Information Act, 2005, and has a structured mechanism in place to deal with matters related to the RTI Act. Your Corporation has aligned to the Online RTI portal of DoPT, Government of India and all applications/ appeals received through the portal are handled through the portal itself, including the physical applications received offline. The mandatory reports such as Quarterly/ Annual reports are submitted periodically within the stipulated timelines on to the website of the Central Information Commission, www.cic.gov.in. Further, as required under the Act, all the relevant details and information mandated vide Suo - motu disclosures under Section 4 (1) (b) are being regularly updated and hosted on the Corporation's website www. hindustanpetroleum.com for the purpose of transparency and better understanding to the public at large.

Your Corporation has a designated Nodal Officer at its Corporate HQO to coordinate, facilitate and oversee its implementation. The RTI applications are responded well within the stipulated time period of 30 days through the Online RTI portal www.rtionline. gov.in. A team of 212 Central Public Information Officers (Regional Managers and HoDs who predominantly constitute as CPIOs) and 46 First Appellate Authorities (Senior Management who constitute FAAs) spread across the country, covering Refineries and major SBUs like Retail, LPG and other Departments ensure seamless and timely handling of the RTI applications received.

During the current financial year your Corporation has successfully handled and processed 2,696 RTI applications, 344 First Appeals and 95 Second Appeals (Central Information Commission Hearings). All the 95 CIC Hearings were held thru VC by the Hon'ble CIC while the CPIOs were physically present in respective NIC studios located at various District Collectorate Offices, and the detailed written submissions were placed in time before the Hon'ble CIC, to enable CIC to pass awards, which clocked a success rate of 81% Orders being passed in favour of your Corporation thereby validating the stand taken by your Corporation.

INDUSTRIAL RELATIONS

During the financial year 2023-24, your Corporation has continued to deliver positive employee relations with its employees, experiencing no instances of industrial unrest across Corporation. Proactive approach of consistent dialogue, understanding and collaboration with employees has led to positive working environment conducive to productivity and growth. Your Corporation recognizes its responsibility to conduct business in a manner that respects the rights and dignity of all its stakeholders.

Your Corporation formulated Human Rights Policy to encourage employees and stakeholders to adopt, promote and respect the elements of human rights within their operations. The Corporation also takes pride in its collaboration with the Central Vigilance Commission, wherein in-house experts conducted Training Programs for Enquiry Officers / Presenting Officers on Departmental Enquiries for various CPSEs/Government Organizations.

For promoting sustainable and inclusive growth of stakeholders under the theme of "One Earth, One Family, One Future" G20 Presidency, your Corporation organised Statutory Compliance Fortnight 2.0 by ensuring social security & welfare measures through various initiatives to the intended beneficiaries including outsourced workforce of the Corporation. Your Corporation demonstrated strong sense of Corporate Responsibility by travelling beyond statutory requirements as recently evidenced in coverage of all our direct and indirect stakeholders with Medical Insurance coverage, Ex-Gratia compensation in case of untoward accidents, organizing special medical camps, etc.

OFFICIAL LANGUAGE IMPLEMENTATION

The usage of Hindi is ensured in the business of your Corporation by motivating the employees. Hindi is being promoted by utilizing various facilities available in the field of Information & Technology including Video Conferencing. To promote the linguistic talent of the employees, awareness about Hindi is created in the offices through online Hindi Competition, Hindi Fortnight, Official Language Conferences and Hindi Workshops etc.

During the current financial year, your Corporation was conferred with 'Rajbhasha Keerti Puraskar - Second Prize' for implementation of Official Language for the year 2022-23 by Ministry of Home Affairs, GOI. This award is given for the best performance in the field of Official Language Implementation (OLI) amongst All PSUs. Your Corporation is coordinating Town Official Language Implementation Committee (TOLIC) of Mumbai based PSUs since 1983 and thereby guiding Mumbai based 61 PSUs in the field of OLI. Other than the TOLIC Meetings, your Corporation has trained the officials of different PSUs through conducting various programs such as Hindi Translation, Promotion of Hindi and Regional Language etc.

Your Corporation has continued with its rich legacy of being honoured with the highest number of Rajbhasha Awards in the entire Oil Industry by receiving 51 Rajbhasha Awards from the Government of India and other agencies during the financial year 2023-24.

CORPORATE SOCIAL RESPONSIBILITY

Your Corporation has consistently aimed to be a model of excellence and act as a driving force for transformation in all its pursuits, whether in fostering business prosperity or fulfilling its societal responsibilities. Your Corporation has consistently upheld the belief in creating shared value and 'Delivering Happiness

through a range of initiatives that have positively impacted millions of lives.

Your Corporation implemented various activities under the focus areas of Child Care, Education, Health Care, Skill Development, Sports, Environment & Community Development, Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government; and Contributions to public funded Universities.

As a responsible Corporate Citizen, your Corporation implemented more than 80 CSR projects under the annual common theme 'Health and Nutrition' notified by Department of Public Enterprises, Government of India. During the year, your Corporation achieved the mechanical completion of Compressed Bio-Gas (CBG) Plant at Village Pathmeda, District Jalore, Rajasthan. This CBG Plant provides purified Bio-Gas from Waste / Bio-mass sources like agricultural residue, cattle dung etc. Other projects under the theme include provision of medical devices and equipment for strengthening public healthcare delivery systems at Primary Healthcare Centers, Community Healthcare Centers and District Hospitals meeting the grassroot healthcare requirements in local and remote areas. Our business locations like Terminals, Depots, LPG Plants, Pipelines, Aviation Stations spearheaded and carried out these CSR activities for the welfare of society.

During the year, your Corporation supported the educational, therapeutic and skill training needs of Children with Special Needs (CwSN) under Project 'ADAPT', with an endeavor to enhance the quality of lives of the children.

Under Project 'Nanhi Kali', adolescent girls, mostly first-generation learners, were provided with remedial classes, material kits, sports curriculum, training and counselling sessions on personal hygiene and career development.

Your Corporation distributed Scholarships to students from various socially-economically disadvantaged sections like SC, ST, OBC and PwD across the country thus supporting their Education from School-Level to Professional courses. Your Corporation also provisioned basic facilities like school furniture items, teaching aids, water coolers etc. and construction of classrooms along with setting-up of smart classes in various government schools for benefit of students in rural areas.

Your Corporation strengthened its collaboration with Indian Army for 'Project Super-50' in UT of Jammu & Kashmir and UT of Ladakh. Under the project, aspiring students from UT of Jammu & Kashmir and UT of Ladakh were provided mentoring and coaching for Medical and Engineering stream. This residential training program gives wings to academic aspirations of youth for their career development. This project supports the Indian Army's 'Sadbhavana' initiative in 'Winning Hearts and Minds' of the local population. This project supports the less-privileged yet aspiring students of the Region in enabling them to compete in various streams like Engineering, Medical and other career-oriented programs. The year saw commencement of similar residential 'Project Super-50' for aspiring SC and ST students in Raigad district of Maharashtra.

To provide basic healthcare facilities in remote rural areas, Mobile Medical Vans were operated under 'Project Dhanwantari' to provide diagnosis, treatment and health awareness at the doorsteps of less privileged people. Under Project 'Dil without Bill', your Corporation extended support for conducting heart surgeries of beneficiaries from lower-economic section with special focus on children.

Your Corporation supported Skill Development Institutes (SDI) conceptualized by Government of India and operationalized by Oil & Gas CPSEs focused on imparting skills in industry-oriented trades for improving employability of weaker sections of the society. SDI Visakhapatnam is being managed by the Corporation along with support of other Oil & Gas CPSEs.

Your Corporation participated and undertook various activities during Swachhta Pakhwada Campaign (1^st - 15^th July, 2023). The campaign saw outreach and participation of more than 21 Lakh stakeholders from across the country. Various awareness generation activities like administration of Cleanliness Pledge, providing Hygiene Kits, Pitching of seed balls and Sapling Plantation were undertaken by our installations and office locations to promote green environment in the society. Corporation's employees coordinated competitions like Slogan Writing, Elocution, Drawing etc. in Schools and Colleges under the theme of 'Swachhta' for new generation.

Your Corporation also supported promising athletes and sportsperson coming from underprivileged background with Scholarship assistance.

Your Corporation made contribution to the Armed Forces Flag Day Fund instituted by Kendriya Sainik Board, Ministry of Defence, Govt. of India for the care, support, welfare and rehabilitation schemes for Ex-Servicemen (ESM) and their dependents.

Awards & Accolades:

1. Corporation felicitated by Hon'ble Raksha Mantri for contribution to Armed Forces Flag Day Fund (AFFDF) at Armed Forces Flag Day CSR Conclave 2023, Delhi.

2. 'Nava Bharat CSR Awards 2023 for Excellence in CSR Activities' for Project Nanhi Kali hosted by Nava Bharat Group, Mumbai.

3. CSR Champion Award by IIT Bombay at Annual CSR Conclave 2023.

4. Conferred as Winner in 'Education and Skill Development' category at the 6^th 'The CSR Journal Excellence Awards 2023' for Project Kashmir Super 50 (Medical) presented by The CSR Journal, Mumbai.

5. Conferred with 1^st Prize in PRSI National Awards 2023 for Best Skill Development Program (PSU) instituted by Public Relation Society of India, Delhi.

6. Conferred with Mahatma Award 2023 for CSR Excellence presented by A Mahatma Foundation hosted by Liveweek Group.

7. Corporation conferred with Best Campaign awards by Public Relation Council of India, Delhi under the following categories:

i. CSR Campaign

ii. Education Campaign

iii. Best use of CSR Project for Child Care

8. Runner-Up in CSR and Sustainability category in 13^th PSE Conclave and Excellence Awards instituted by Indian Chamber of Commerce, Kolkata.

9. 'Green Healthcare Excellence in Sustainable Healing' for our flagship project 'Dil without Bill' at Environment Conclave & Awards 2023 instituted by Nava Bharat Group, Mumbai.

10. Conferred with 7^th 'CSR Health Impact Awards' under category instituted by Integrated Health and Wellbeing Council, Delhi

• CSR Health System Strengthening Project (Silver)

• CSR Covid Relief Project - Large (Silver)

• CSR Swachh Bharat Project (Bronze)

11. Conferred with Fortune Leadership Awards 2023 instituted by The Economic Times in the following categories:

• Excellence in Provision of Literacy & Education Award

• Excellence in Concern for Health Award

12. National CSR Award at 11^th Global Safety Summit Awards instituted by Fire and Safety Forum, Kerala

13. Best Education Support Initiative of the Year 2024 - PSU' award for ADAPT presented at Indian Social Impact Awards by brand honchos.

14. 'Grow Care India CSR Award 2022' (Gold) for 'Medical and Health' at Grow Care India CSR Excellence Award 2022 instituted by Grow Care Foundation.

15. Gold Award at Apex India CSR Excellence Awards 2022 for Health Awareness / Welfare category at Apex India Foundation, Delhi.

The details of CSR activities of the Corporation containing details of CSR Committee Members, brief outline of the CSR policy, overview of the CSR initiatives, prescribed expenditure, amount spent etc. that form part of this Report are furnished in Annexure III.

CORPORATE GOVERNANCE

Your Corporation continues to adopt the best practices of Corporate Governance to ensure transparency, integrity and accountability in its functioning. The Corporate Governance Report highlighting these endeavours has been incorporated as a separate section that form part of the Annual Report for financial year 2023-24.

PROCUREMENT OF GOODS & SERVICES FROM MSEs

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012, and its amendments thereto. In line with said policy, your Corporation has set an annual goal of sourcing a minimum procurement of 25% of its total requirements from MSEs, and within it, 4% of the total requirement has been earmarked for procurement from MSEs owned by SC/ST entrepreneurs and another 3% from women entrepreneurs. For the benefit of MSEs, the MSE procurement details are regularly uploaded on the Sambandh Portal of the Ministry of MSME, besides displaying the Annual Procurement Plan on the Corporation's website.

Against the set target of 25% of the total procurement for financial year 2023-24, your Corporation has achieved 41.24% (H 4,271.80 Crore) of procurement of goods and services from MSEs, excluding items that are beyond the scope of MSEs. The excluded items are crude oil, petroleum products, logistics costs through shipping, railways and pipelines, LNG/Natural Gas, API line pipes, OEM spares, OEM services, proprietary items and services, technology licenses and licensor-mandated items, and plants and machinery (single item value equal to or more than H 50 Crore).

To promote the objectives of procurement from MSEs as laid down in Public Procurement Policy, 87 vendor development programmes (VDPs) / Buyer-Supplier meetings for MSEs were conducted during the financial year 2023-24, including 11 no. VDPs for MSEs owned by SC/ST entrepreneurs and 9 no. VDPs for MSEs owned by women entrepreneurs. During these meetings, the Corporation procurement processes were articulated through detailed presentations to MSE vendors with the intent of increasing awareness on vendor registration processes, tendering processes, the TReDS platform, procurement on the GeM platform, etc. The implementation of various government directives/policies for providing relief to MSMEs and promoting the indigenization of products and services was also explained during the programme.

Your Corporation is registered with the TReDS Digital platform, an institutional mechanism set up by the Reserve Bank of India to facilitate the trade receivable financing of Micro Small and Medium Enterprises (MSMEs) from corporate buyers through multiple financiers. Integrating its ERP system with three of the service providers, namely A.Treds Ltd., Mynd Solutions Pvt. Ltd., and Receivables Exchange of India Ltd., the Corporation has enabled MSMEs to auction their trade receivables at competitive rates through online bidding by financiers. Numerous MSME vendors have onboarded this platform and benefited from the bill discounting facility that provides liquidity.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Corporation has ensured compliance with various provisions under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. To inculcate appropriate workplace behavior and promote gender sensitization, the employees of the Corporation have undergone awareness sessions / workshops on the subject. Internal Committees (IC) of the Corporation were reconstituted.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis Report forms part of the Annual Report for FY 2023-24.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Your Corporation discloses its initiatives on environment, social and governance in accordance with the directives of SEBI in the form of Business Responsibility and Sustainability Report (BRSR). The BRSR for FY 2023-24 is hosted on the Company's website and is available at the link: https://www.hindustanpetroleum.com/ documents/pdf/HPCIBRSR 76077074 V1.pdf

FINANCIAL STATEMENTS OF SUBSIDIARIES

In terms of Proviso to Section 136(1) of the Companies Act, 2013, your Corporation will place separate audited Financial Statements in respect of each of its Subsidiary Company on its website and also provide a copy of separate audited Financial Statements in respect of each of its Subsidiary Companies to any Shareholder of the Corporation who seeks the same. The Financial Statements of the Subsidiary Companies will also be kept open for inspection at the registered offices of the Corporation/respective Subsidiary Companies.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013, a separate statement containing salient features of the Financial Statements of Subsidiary/Associate/Joint Venture Companies in Form AOC-1 is attached along with the Consolidated Financial Statements.

COST AUDIT

The maintenance of Cost Records, as specified under Section 148(1) of the Companies Act, 2013 is mandated and accordingly such accounts and records are made and maintained. The Cost Audit for FY 2022-23 was carried out and the Cost Audit Reports were filed with the Ministry of Corporate Affairs within the stipulated time for filing.

DIRECTORS

Your Company's Board presently comprises 13 Directors.

The Whole time Directors are Shri Pushp Kumar Joshi (Chairman & Managing Director), Shri Rajneesh Narang (Director - Finance),

Shri S. Bharathan (Director - Refineries), Shri Amit Garg (DirectorMarketing) and Shri K S Shetty (Director - Human Resources).

The Government Nominee Directors are Shri Vinod Seshan, Director, Ministry of Petroleum & Natural Gas (MOP&NG) and Shri Pankaj Kumar, Director (Production) of Oil and Natural Gas Corporation (ONGC).

The Independent Directors are Smt. Vimla Pradhan, Shri Bechan Lal, Shri Vivekananda Biswal, Shri Ramdarshan Singh Pal, Dr. Nagaraja Bhalki and Shri K S Narendiran.

As per the provisions of Section 152 of the Companies Act, Shri Pankaj Kumar and Shri S. Bharathan are the Directors who are liable to retire by rotation at the next Annual General Meeting and being eligible offer themselves for re-appointment.

DETAILS OF CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) DURING FY 202324 AND TILL DATE

A) Directors

• Shri K S Shetty was appointed as Director - Human Resources (Whole Time Director) on the Board of your Company effective May 01,2023.

• Shri Vinod Seshan, Director, MOP&NG was appointed as Government Nominee Director (Representative of MOP&NG) on the Board of the Company effective May 13, 2024.

• Smt. Sujata Sharma, Joint Secretary, (M&OR), MOP&NG, Government Nominee Director (Representative of MOP&NG) has ceased to be Director of the Company effective May 13, 2024.

B) KMP

During the financial year 2023-24, apart from the details of changes as covered in 'A' above, there were no changes in the other Key Managerial Personnel.

C) Resignation of a Director who resigns from his office by giving a notice in writing to the Company

During the year, there were no cases observed where Directors resigns from their office by giving a notice in writing to the Company.

NUMBER OF MEETINGS OF THE BOARD

During financial year 2023-24, 12 Board Meetings were held. The details of these Meetings are given in the Corporate Governance Report which is part of Annual Report.

MANAGERIAL REMUNERATION

By virtue of MCA Notification dated 5^th June 2015, Government Companies are exempted from complying with the requirement of

Section 197 (Chapter XIII) of the Companies Act, 2013. Hence, the Rules made thereunder i.e., Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are also not applicable to Government Companies.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Your Corporation being a Government Company, the compliance of Section 134 (3) (p) is exempted by virtue of MCA Notification dated 5^th June 2015 as the annual evaluation of the performance of the Board, its Committees and of Individual Directors are carried out by the Administrative Ministry i.e., MOP&NG.

DECLARATION BY INDEPENDENT DIRECTORS

Statement of declarations as required under Section 149(7) of the Companies Act, 2013 & Regulation 16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been obtained from the Independent Directors.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

Your Corporation, being a Government Company is exempted to furnish information under Section 134(3)(e) of the Companies Act, 2013 vide MCA Notification dated 05^th June 2015.

OPINION OF BOARD REGARDING INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTOR APPOINTED DURING THE YEAR

Your Corporation, being a Government Company, all the Directors including Independent Directors are appointed by Government of India.

Independent Directors are selected by search committee constituted by Government of India from mix of eminent personalities having requisite expertise and experience in diverse fields.

Out of Six Independent Directors, Shri Vivekananda Biswal is exempted from undergoing Proficiency Test by virtue of proviso of Rule 6 (4) of Companies (Appointment and Qualification of Directors) Rules, 2014. Other four Independent Directors have cleared their Proficiency Test whereas one Independent Director has a time to undergo test within a period of 2 years from the date of inclusion of name in the Independent Directors' databank.

POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

Your Corporation, being a Government Company, the remuneration payable to Key Managerial Personnel and other employees are fixed by the Government of India. However, payment like Performance Related Pay is placed for the approval of Nomination and Remuneration Committee.

AUDIT COMMITTEE

The present composition of Audit Committee, which requires reporting under Section 177(8) of the Companies Act, 2013 is given as under:

Shri Rajneesh Narang, Whole Time Director is a permanent Invitee to the Committee.

During the financial year 2023-24, there was no change in the composition of Audit Committee.

During the year, there were no instances where Board had not accepted the recommendations of Audit Committee. The recommendations of Audit Committee are broadly accepted by the Board.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has appointed M/s. Ragini Chokshi & Co., a firm of Practicing Company Secretaries to undertake Secretarial Audit of the Company for the Financial Year 2023-2024. The Report of Secretarial Auditor in Form No. MR-3 is annexed herewith and marked as Annexure IV.

The Report does not contain qualification, reservation or adverse remark except the following:

1. The Company was unable to adhere to the requirements outlined in Regulation 17 (1) of SEBI LODR, 2015, regarding having required number of Independent Directors on its Board from 01-05-2023 to 31-03-2024. However, the Company being a Government Company, the power to appoint Directors, including Independent Directors, vests with the Government of India.

In this regard, your Company confirms that being a Government Company, which is under the Administrative Control of Ministry of Petroleum and Natural Gas (MOP&NG), the power to appoint Directors (including Independent Directors) and finalizing the terms and conditions of appointment vest with Government of India. The matter regarding appointment of required number of Independent Directors has been taken up with MOP&NG from time to time and the Government is seized of the matter.

2. Regulation 60(2) of the SEBI LODR, 2015, requires advance intimation i.e., at least prior seven working days about the record date on payment of Interest on NCD to the stock exchanges. During the Year, the Company has complied with this requirement except a slight delay on one of the occasion. Since, this was pointed out by the Stock Exchanges for levy of fine, the Company made representation to the Stock Exchanges for condoning the delay and waiver of fine. Reply is awaited.

COMPLIANCE WITH APPLICABLE SECRETARIAL STANDARDS

Your Corporation has complied with applicable Secretarial Standards in respect of Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).

C&AG AUDIT

C&AG's comment upon or supplement to the Statutory Auditors' Report on the Accounts for the year ended 31^st March, 2024 is attached along with Financial Statements. Further, as at 31 March, 2024, there are eight pending paras related to the C&AG audit. These relate to encashment of Earned Leave/Half Pay leave/Sick Leave as well as Employer's share of EPF contribution on leave encashment; non-recovery of perquisite tax; payment of shift allowance to executives; payment of stagnation reliefs; non-recovery of dues in a case of bank guarantee, not encashed; additional expenditures due to non-utilisation of pipeline in economical manner; infructuous expenditure incurred on creation of certain facilities; and, opportunities foregone to conserve energy. The audit observations have been suitably replied.

RELATED PARTY TRANSACTIONS

The details of transactions entered into with the Related Parties during the financial year 2023-24 in Form No. AOC-2 is annexed herewith and marked as Annexure V.

WEB LINK OF ANNUAL RETURN

Web link of Annual Return (MGT-7) is available at https:// www.hindustanpetroleum.com/documents/pdf/Annual Return MGT-7.pdf

PARTICULARS OF EMPLOYEES

The details regarding the number of women employees vis-a-vis the total number of employees is given herein under:

REPORTING OF FRAUDS BY AUDITORS

During the financial year 2023-24, Auditors have not reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board's report.

DETAILS OF EACH OF ABOVE FRAUD REPORTED TO THE AUDIT COMMITTEE OR THE BOARD DURING THE YEAR

NIL

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 forms part of the Notes to the Financial Statements provided in this Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Corporation that have occurred between the end of the financial year to which the Financial Statements relate and the date of this report.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

During the financial year 2023-24, no application has been made or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF.

There are no instances of one-time settlement done with banks/ financial institutions during the financial year.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The details on the performance and financial position of Subsidiary, Associate and Joint Venture Companies are given in Management Discussion & Analysis Report. Further, pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of Financial Statements of Subsidiary, Associate and Joint Venture Companies in Form No. AOC-1 forms part of the Annual Report for FY 2023-24, separately.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATES

During the financial year 2023-24, a wholly-owned subsidiary, 'HPCL Renewable & Green Energy Limited' was incorporated on January 19, 2024, for consolidating the existing green business of the Corporation under one umbrella and expanding further into Green and Renewable Energy business.

There are no instances of companies which have ceased to be your Corporation's Subsidiaries, Joint Ventures or Associate companies during financial year 2023-24.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During financial year 2023-24, your Corporation has not received any Order or Direction of any Hon'ble Court or Tribunal or Regulator, which either affects your Corporation's status as a going concern or which substantially or significantly affects your Corporation's business operations.

DETAILS OF DEPOSITS

Your Corporation has not been accepting any Deposits, as specified in Section 73 to Section 76 of the Companies Act, 2013 and therefore there do not call for any disclosure of Deposits as required under Rule 8(5)(v) of Companies (Accounts) Rules, 2014.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed that:

i. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

ii. The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and the profit and loss of the Company for that period.

iii. The Directors have 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.

iv. The Directors have prepared the Annual Accounts on a going concern basis.

v. The Directors, have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively.

vi. The Directors have 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 acknowledges the guidance and support provided by the Government of India, Ministry of Petroleum and Natural Gas, other relevant Ministries, State Governments, and various Authorities.

The Board of Directors wish to place on record its appreciation for all the dealers, distributors nationwide, and HP-Pariwar for their continued commitment in improving customer service and overall performance.

The Corporation's employees continue to demonstrate a deep sense of commitment towards excellence. The Board of Directors expresses its gratitude for their valuable contributions and looks forward to their continued dedication in the years ahead, enabling the Corporation to achieve even greater success.

The Board of Directors remain thankful to the Shareholders for their faith and support in the Corporation's endeavours.

For and on behalf of the Board of Directors