1. COMPANY¢â‚¬â„¢S PHILOSOPHY ON CORPORATE GOVERNANCE 1. COMPANY¢â‚¬â„¢S PHILOSOPHY ON CORPORATE GOVERNANCE

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  • 52 A n n u a lR e p o r t

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    REPORT ON CORPORATE GOVERNANCE

    The objective of Corporate Governance is to enhance and maximize shareholder’s value and protect the interest of other stakeholders like customers, employees and society at

    large in order to build an environment of trust and confidence among all the constituents, which may have competing as well as conflicting interest.

    1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

    IndianOil believes that good Corporate Governance practices ensure ethical and efficient conduct of the affairs of the Company and also help in maximizing value for all its

    stakeholders. The Company endeavours to uphold the principles and practices of Corporate Governance to ensure transparency, integrity and accountability in its

    functioning which are vital to achieve its Vision of being the Energy of India and a Globally Admired Company.

    IndianOil recognises that good Corporate Governance is a continuous exercise and reiterates its commitment to pursue the highest standards of Corporate Governance in the

    overall interest of all its stakeholders. For effective implementation of the Corporate Governance practices, IndianOil has a well-defined policy framework inter alia

    consisting of the following:-

    • Code of Conduct for Directors and Senior Management Personnel

    • Code of Conduct for prevention of Insider Trading

    • Enterprise Risk Management Policy

    • Integrity Pact to enhance transparency in business

    • Whistle Blower Policy

    • Conduct, Discipline and Appeal Rules for employees

    2. BOARD OF DIRECTORS

    (a) Composition of Board of Directors

    The Board of IndianOil comprises of an optimum combination of Executive (Whole-time) and Non-Executive (Part-time) Directors. Non-Executive (part-time) Independent

    Directors are persons with proven record in diverse areas like energy, law, academics, finance, marketing, administration, etc.

    The strength of the Board of IndianOil was 16 Directors as on 31.03.11 comprising of 8 Executive (Whole-time Functional) Directors (including Chairman) and 8 Part-time

    Non-Executive Directors, out of which 6 are Independent Directors and 2 are Government Nominee Directors. The Company has not been able to comply with the

    requirement of 50% Independent Directors on its Board, as IndianOil, being a Government Company under the administrative control of the Ministry of Petroleum & Natural

    Gas (MoP&NG), the Directors are nominated by the Government of India. The Company has been pursuing with the Government of India to induct requisite number of

    Independent Directors as required under clause 49 of the Listing Agreement.

    The composition of the Board of Directors as on 31.03.11 is given below:-

    Sl. No. Name Category

    1. Shri R. S. Butola Chairman w.e.f. 28.02.2011

    2. Shri S. V. Narasimhan Director (Finance)

    3. Shri G. C. Daga Director (Marketing)

    4. Shri B. N. Bankapur Director (Refineries)

    5. Shri K. K. Jha Director (Pipelines)

    6. Dr. R. K. Malhotra Director (Research & Development) w.e.f 05.08.2010

    7. Shri Sudhir Bhalla Director (Human Resources) w.e.f. 27.10.2010

    8. Shri A. M. K. Sinha Director (Planning & Business Development) w.e.f 16.03.2011

    9. Shri P. K. Sinha Government Nominee Director

    10. Shri Sudhir Bhargava Government Nominee Director

    11. Prof. (Dr.) Indira J. Parikh Independent Director

    12. Shri Anees Noorani Independent Director

    13. Dr. (Smt.) Indu R. Shahani Independent Director

    14. Prof. Gautam Barua Independent Director

    15. Shri Michael Bastian Independent Director

    16. Shri Nirmal Kumar Poddar Independent Director

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    (b) Board Meetings

    The Board of Directors is the apex body which oversees the overall functioning of the Company. The Board of IndianOil has set strategic goals in order to achieve its Vision

    Statement. The Board defines the Company’s policy and oversees its implementation in attaining its goal. The Board has constituted various committees to facilitate the

    smooth and efficient flow of the decision making process.

    The dates of the Board Meetings are fixed well in advance and intimated to the Board members so as to enable the Directors to plan their schedule accordingly. The meetings

    of the Board of Directors are generally held once in a month. During the financial year 2010-11, eleven such Board Meetings were held. The agenda papers are circulated to

    the Directors well in advance before the meeting. However, certain exigent matters are tabled at the Board Meeting with the approval of the Chairman. The agenda items are

    comprehensive and informative in nature to facilitate deliberations and appropriate decision at the Board Meeting.

    Presentations are made to the Board on various functional and operational areas of the Company like Refinery, Pipelines and Marketing operations, major projects, financial

    highlights etc. The agenda placed before the Board inter alia includes the following:-

    • Annual operating plans and Capital and Revenue budgets

    • Quarterly and Annual Financial results of the Company

    • Dividend declaration

    • Quarterly report on borrowings and treasury operations

    • Constitution of Board committees with terms of reference

    • Minutes of meetings of Audit Committee and other Committees of the Board, as also resolutions passed by circulation

    • Proposals for amalgamation, mergers and acquisitions

    • Details of investment in any joint venture / subsidiary

    • New projects and expansion plans

    • Status of various projects

    • Risk management and minimization process

    • HR related issues

    • Safety / Security related matters

    • General notices / matters of interest of Directors

    • Periodic reports to the Board on :-

    - Treasury Operations

    - Project status

    - Risk Management

    - Secretarial Audit / reports

    - Compliance of laws

    - Disciplinary cases

    - Action Taken Report (ATR) on decisions of the Board

    - Foreign tour report of Whole-time Functional Directors / officials

    The Board Minutes are prepared within a day of the Board Meeting and endeavour is made to obtain the clearance of the Whole-time Functional Directors and approval of the

    Chairman at the earliest. Thereafter, the minutes are circulated to the concerned department / group for implementation. ATR is obtained and put up to the Board

    periodically. Details of the Board Meetings held during the year 2010-11 are as under:-

    Sl. No. Date Board Strength No. of Directors Present

    1. 27-04-2010 15 10 2. 28-05-2010 15 14 3. 25-06-2010 15 14 4. 24-07-2010 14 13 5. 30-08-2010 14 14 6. 20-09-2010 14 12 7. 13-11-2010 15 13 8. 22-12-2010 15 12 9. 25-01-2011 15 14 10. 10-02-2011 14 13 11. 29-03-2011 16 14

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    (c) Attendance of each Director at Board Meetings held during 2010-11, last Annual General Meeting and Number of other Directorships and Chairmanship /

    Membership of Committees of each Director in various companies is as under:-

    * The details of Directorship on Board of other companies and committee position is as on the date of cessation from the Board of IndianOil.

    Remarks:-

    1. Shri R. S Butola was inducted on the Board as Chairman w.e.f. 28.02.2011

    2. Shri B. M. Bansal ceased to be Chairman on 31.01.2011

    3. Dr. R. K. Malhotra was inducted on the Board w.e.f. 05.08.2010

    4. Shri Sudhir Bhalla was inducted on the Board w.e.f. 27.10.2010

    5. Shri A. M. K. Sinha was inducted on the Board w.e.f. 16.03.2011

    6. Shri Anand Kumar ceased to be Director on 30.06.2010.

    7. Shri V. C. Agrawal ceased to be Director on 31.07.2010.

    Name of the Director No. of Attendance No. of Member- Chairman- Board at the Directorship ship of ship of

    Meetings AGM on in other committees committees attended 21.09.2010 companies in other in other out of 11 (Yes / No) as on companies Companies

    meetings held 31.03.11 as on 31.03.11 as on 31.03.11

    Whole-time Functional Directors

    1Shri R. S. Butola, Chairman 1 NA 2 - -

    2Shri B. M. Bansal, Chairman & Director (P&BD) 9 Yes 3 - -

    Shri S. V. Narasimhan, Director (Finance) 11 Yes 2 2 -

    Shri G. C. Daga, Director (Marketing) 11 Yes 4 - -

    Shri B. N. Bankapur, Director (Refineries) 10 Yes 3 2 -

    Shri K. K. Jha, Director (Pipelines) 11 Yes 1 - -

    3Dr. R. K. Malhotra, Director (Research & Development) 7 Yes 2 - -

    4Shri Sudhir Bhalla, Director (Human Resources) 5 NA - - -

    5Shri A. M. K. Sinha, Director (Planning & Business Development) 1 NA - - -

    6Shri Anand Kumar, Director (Research & Development) 3 Yes 2 - -

    7Shri V. C. Agrawal, Director (Human Resources) 4 Yes 1 - -

    Part-time Non-Executive Directors (Govt. nominees)

    Shri P. K. Sinha 9 Yes 2 - -

    Shri Sudhir Bhargava 8 Yes 2 - -

    Part-time Non-Executive Independent Directors

    Prof. (Dr.) Indira J. Parikh 8 Yes 4 - -

    Shri Anees Noorani 10 Yes 2 1 -

    Dr. (Smt.) Indu R. Shahani 5 No 2 1 -

    Prof. Gautam Barua 10 Yes 1 - -

    Shri Michael Bastian 9 Yes 4 2 3

    Shri N. K. Poddar 11 Yes - - -

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    None of the Directors on the Board is a member of more than 10 Committees or Chairman of more than 5 Committees

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